Prosociality and fiscal honesty: Tax evasion in Italy, United Kingdom, and Sweden

In this experimental study, we focus on the relationship between prosociality and fiscal honesty in different institutional scenarios relevant to welfare states. We combine three different experimental settings: efficiency, tax rate, and support for people in need. We ran the experiment in three European countries: Italy, United Kingdom, and Sweden. Our main result shows that prosociality plays a key role in determining tax compliance in the different laboratories, even if prosocial people’s choices are not independent from the institutional context. Thus, both culture and institutions may determine the different levels of tax compliance in the three countries considered for study. Policy implications and suggestions for further research are presented in the concluding section.