David Chagoyen-Neumann
Pronouns: he/him/his
Research Mentor(s): Antonios Koumpias
Research Mentor School/College/Department: Social Sciences, College of Arts and Sciences, University of Michigan-Dearborn / Other
Program:
Authors: David Chagoyen-Neumann, Antonios Koumpias, Jorge Martinez-Vazquez
Session: Session 3 11:00 – 12:50 a.m. Hussey Room
Poster:
Abstract
This study examines the impact of International Monetary Fund (IMF) austerity programs on voluntary tax compliance, focusing on the unintended consequences of externally imposed fiscal reforms. IMF stabilization programs, while aiming to stabilize economies, often come with stringent conditions that may evoke public resentment. Comparing perceptions towards tax compliance in IMF-adopting countries to non-adopting countries, we estimate the treatment effect of IMF on tax morale using multivariate logistic regression models. We combine policy information on the presence of an active IMF programs based on data from Kentilekenis and Stubbs (2023) and the IMF with survey measures of tax morale from the World Values Survey spanning 1980-2022. Our results provide mixed evidence of the effects of IMF programs on tax morale. Using unadjusted regression models and models using a sparse set of socio-economic controls, we find null effects of IMF programs on tax morale. However, when accounting for social norms and factors capturing trust in government institutions and generalized trust, we obtain statistically significant reductions on tax morale. The findings inform policymakers about the potential negative effects of harsh stabilization programs on tax compliance, aiding in improved planning and revenue forecasting by both national governments and the IMF.
