Power, justice, and trust: a moderated mediation analysis of tax compliance among Ethiopian business owners

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Gobena, L.B. and Van Dijke, M. ORCID: 0000-0001-9974-5050, 2016. Power, justice, and trust: a moderated mediation analysis of tax compliance among Ethiopian business owners. Journal of Economic Psychology, 52, pp. 24-37. ISSN 0167-4870

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Official URL: http://doi.org/10.1016/j.joep.2015.11.004

Abstract

We explored the moderating roles of legitimate and coercive power held by the tax authority in the relationship between procedural justice, trust in the tax authority, and voluntary tax compliance. Drawing from fairness heuristic theory and the slippery slope framework of tax compliance, we predicted that procedural justice fosters voluntary tax compliance, particularly when legitimate power of the tax authority is low and when coercive power of the authority is high. Moreover, we predicted that these interactive effects are mediated by (cognition-based) trust. Finally, we predicted that coercive power of the tax authority is positively related with enforced tax compliance. The results of a field study among Ethiopian business owners supported most predictions. This research is among the first to integrate social-psychological and deterrence-related factors to understand tax compliance behavior in a developing country.

Item Type:

Journal article

Alternative Title:

Power, justice, and compliance [working title]

Publication Title:

Journal of Economic Psychology

Creators:

Gobena, L.B. and Van Dijke, M.

Publisher:

Elsevier for the International Association for Research in Economic Psychology

Date:

February 2016