Tax Morale and Conditional Cooperation

39 Pages Posted: 11 May 2006

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Benno Torgler

Yale University - Yale Center for International and Area Studies

Date Written: April 2006


Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation between perceived tax evasion and tax morale. The results remain robust after exploiting endogeneity and conducting several robustness tests. We also observe a strong positive correlation between institutional quality and tax morale.

Keywords: tax morale, tax compliance, tax evasion, pro-social behavior, institutions

JEL Classification: H26, H73, D64

Suggested Citation

Frey, Bruno S. and Torgler, Benno, Tax Morale and Conditional Cooperation (April 2006). Available at SSRN: or

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002

Benno Torgler

Yale University - Yale Center for International and Area Studies ( email )

P.O. Box 208206
New Haven, CT 06520-8206
United States


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