Tackling the Propensity towards Undeclared Work: Some Policy Lessons from Croatia

• Authors: Colin C. Williams , Josip Franic
• Languages of publication: EN

Abstracts

EN

The aim of this paper is to evaluate contrasting policy approaches towards undeclared work. To do so, evidence is reported from 1,000 face-to-face interviews conducted in Croatia during 2013. Logistic regression analysis reveals no association between participation in undeclared work and the perceived level of penalties and risk of detection, but a strong association between participation in undeclared work and the level of tax morality. It thus confirms recent calls for the conventional direct controls approach, which seeks to deter engagement in undeclared work by increasing the penalties and risk of detection, to be replaced by an indirect controls approach which seeks to improve tax morality so as to encourage greater self-regulation and a culture of commitment to compliance. The implications for theory and policy are then discussed.

Keywords

EN

informal sector; tax morale; institutional theory; tax evasion; Croatia; South-East Europe

• Publisher: Sciendo
• Journal: South East European Journal of Economics and Business
• Year: 2015
• Volume: 10
• Issue: 1
• Pages: 18-31

Dates

published

2015-04-01

online

2015-08-04

Contributors

author

Colin C. Williams

• Professor of Public Policy Management School, University of Sheffield, UK

author

Josip Franic

• Marie Curie Research Fellow Management School, University of Sheffield, UK

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Identifiers

DOI

10.1515/jeb-2015-0003