TY  - RPRT
N2  - This paper analyzes the relationship between individuals' aversion to ethnic diversity, the degree of fiscal and political decentralization, and tax morale. Our theory is based on the assumption that individuals are risk averse in contributing to the provision of public goods benefiting other ethnic groups, and threfore display a lower tax morale. We find scope for policy intervention-specifically, our model predicts that the effect of individuals' aversion to ethnic diversity on taxmorale is smaller or null in decentralized political and fiscal systems relative to centralized ones. The theory highlights the role of decentralization reforms to cut down inter-ethnic redistribution in con icting environments. We test our results by using individual data from the World Value Survey, and several decentralization measures from Fan et al. (2009). According to our most preferred estimation, a one-scale change in the attitude toward ethnic diversity reduces tax morale of 0.03 in centralized system. We rather find no impact in decentralized states.
M1  - imt_eic_working_paper
SN  - 2279-6894
PB  - IMT School for Advanced Studies Lucca
A1  - Belmonte, Alessandro
A1  - Dell'Anno, Roberto
A1  - Teobaldelli, Désirée
UR  - http://eprints.imtlucca.it/3609/
KW  - Keywords: Ethnic diversity
KW  -  Decentralization
KW  -  Tax morale
KW  -  Risk-aversion.   JEL Classification: J15
KW  -  H26
KW  -  H73
Y1  - 2016/12//
AV  - public
TI  - Tax Morale, Aversion to Ethnic Diversity, and Decentralization
EP  - 37
ID  - eprints3609
ER  -