Year: 2025
Type: article
Abstract: Do individuals contribute to public service provision when others in the community shirk on their taxes? The long‐standing literature on conditional cooperation has widely documented a knock‐on effect of freeriding. I argue that individuals may turn to civil society as an alternative way to fund public services. First, I leverage a natural experiment in Slovakia, based on the timing of a naming‐and‐shaming tax policy. Communities exposed to a public disclosure of noncompliance donate 16% more. Second, I replicate this via a survey experiment, showing an increase in charitable giving of 9% as well as eroding faith in the tax system. Highlighting the role of altruism, donations increase the most among respondents who believe their town relies on public services. In a conjoint, treated respondents also preferred public donations, suggesting an additional reputation mechanism. Finally, cross‐country survey evidence bolsters external validity, showing a robust correlation between perceived tax cheating and local volunteering.
DOI: 10.1111/ajps.70026
Author: Simone Paci
Institution: Stanford University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4416769564