The existing experimental literature suggests women are more compliant than men when paying taxes but may free ride more when contributing to public goods. It is unclear which effect dominates when paying for public goods through taxation. Experiments conducted in three European countries and the U.S. are used to investigate this issue. The results suggest that women bear a greater burden of the pro- vision of public goods for the parameters in the experiment. The results indicate the gender gap in com- pliance is due to differences in both the extensive and intensive margins.
Historical Institutionalism grew out of an interest in explaining variation. When we began asking ourselves why policies and politics differed so much across nations and over time, political institutions forced themselves into the center of the analysis. Institutions, we argued, structured politics. By now, this basic insight has become commonplace. Even if this was once an innovative contribution, today few would argue against the proposition that institutions are important because they structure strategic incentives and constraints.
How can evolutionary ideas be applied to the study of social and political institutions? Charles Darwin identified the mechanisms of variation, selection and retention. He emphasized that evolutionary change depends on the uniqueness of every individual and its interactions within a population and with its environment. While introducing the contributions to this special issue, we examine some of the ontological positions underlying evolutionary theory, showing why they are appropriate for studying issues in economics, political science and sociology. We consider how these ideas might help us understand both institutional change and the formation of individual preferences.
Andrighetto et al. | Are Some Countries More Honest than Others? Evidence from a Tax Compliance Experiment in Sweden and Italy
This study examines cultural differences in ordinary dishonesty between Italy and Sweden, two countries with different reputations for trustworthiness and probity. Exploiting a set of cross-cultural tax compliance experiments, we find that the average level of tax evasion (as a measure of ordinary dishonesty) does not differ significantly between Swedes and Italians. However, we also uncover differences in national “styles” of dishonesty. Specifically, while Swedes are more likely to be either completely honest or completely dishonest in their fiscal declarations, Italians are more prone to fudging (i.e., cheating by a small amount). We discuss the implications of these findings for the evolution and enforcement of honesty norms.
Sven Steinmo | Bucking the Trend? The Welfare State and the Global Economy: The Swedish Case Up Close
The conventional ‘globalization’ thesis predicts that increased factor mobility will reshape political incentives across the world. According to the most dire predictions, capital and labour will flee welfare states in favour of jurisdictions where they will find cheaper employees, less restrictive governmental regulations and lower taxes. This argument specifically suggests that countries with very heavy tax burdens will be the most vulnerable to the competitive forces in the new global economy. Finally, this theory suggests that political leaders in high tax countries will have no alternative other than to reduce tax burdens and ultimately roll back welfare state spending–else they suffer the wrath of profit-maximizing investors and alienated voters.
Many have argued that the increased international mobility of both capital and labor witnessed in recent years will force advanced capitalist democracies to cut taxes and, thus, ultimately roll back their welfare states. This analysis tests this hypothesis through an examination of policy developments in Sweden, the country with the world’s heaviest tax burden and largest social welfare state. The analysis focuses on the history and structure of taxation policy (the policy arena predicted to be most directly affected by globalization). The findings reveal that there have been very important changes in the Swedish welfare state: The tax and spending regimes have been changed less than the globalization thesis predicts. This analysis argues that Sweden has indeed adapted and changed in recent years but finds little support for the more dire thesis that countries like Sweden must abandon their high-tax regimes and/or their generous social welfare systems.
Some economists argue that institutions are the most important factor affecting varia- tion in economic growth. There is a need, however, to better understand how and why institutions emerge and change. Informed by evolutionary theory and complexity sci- ence, this chapter develops a conceptual framework that follows models of cultural evolution in viewing institutions as part of a nongenetic system of inheritance. This framework is used to examine how broad historical factors (not just economic factors) influence present-day institutional arrangements and economic outcomes, as well as how noninstitutional aspects of culture (e.g., values, beliefs) interact with institutions to shape behavior in particular contexts. Overall, this framework emphasizes the pro- cesses by which institutions evolve, and how they can coevolve with other institutions and culture. This approach is illustrated using four examples to demonstrate how evolu- tion theory and complexity science can be used to study institutional emergence and change. Explicit models of the processes of institutional evolution need to be developed and then tested and assessed with data. This framework holds promise to bring together and synthesize the findings and insights from a range of different disciplines.
The United States of America is the richest and most powerful nation on earth. It is, by definition, unique. Indeed, the study of American politics is generally considered to be so special that it warrants its own sub-field in most political science departments. Those who do try to compare America typically write about what is called “American Exceptionalism.”1 Of course this makes eminent sense, America is the dominant military and economic power in the world and it has used this power to shape the world around it. Even in the midst of one of the worst economic crises in history, America produces approximately 25 percent of the world gross product. No other country has the influence (for good or ill) as does the United States.
This essay argues that in order to understand how institutions shape political choices and history we should go further toward understanding the interactive relationships between institutions and the cognitive mind. The article explores the significant body of research and literature developing in social and evolutionary psychology, cognitive science and decision theory. This literature has gone beyond the observation humans are not the individual utility maximizers stylized in early institutionalist theorizing. A massive body of experimen- tal and empirical research clearly demonstrates, for example, that a) individuals only rarely have stable and hierarchical preferences, b) are generally quite unlikely to go through the cognitive effort implied in a ‘rational’ choice decision matrix, c) humans are efficient decision makers, but we have remark- able capacities to post-hoc justify choices and restructure our memories so that we can view our decisions as coherent. In the end the paper argues that public administration scholars need to adopt a non-reductionist approach to studying human motivation.
J. D'Attoma et al.| Measuring Budgetary Preferences Using Interactive Budget Simulations: A Holistic Approach
The literature on budget preferences has become increasingly bifurcated with schol- ars studying preferences over spending and revenue as separate outcomes of interest. Certainly, this substantive divide has led to important advancements in explaining spe- cific questions related to each side of the ledger, but the distinction within the field has come at a theoretical and empirical cost. In this paper, we argue that a holistic ap- proach, accounting for spending and revenue preferences, can overcome several existing issues found in the literature. Yet, a major barrier to studying budget preferences in this way lies with traditional methods, such as survey questionnaires. We introduce online interactive budget tools as a flexible, multi-purpose method for scholars to col- lect attitudinal measures on spending and revenue items. We test whether the holistic approach elicits different behaviors than the more singular approaches using data from a 2018 Mechanical Turk survey with an embedded budget tool, and a randomized ex- periment. We make two important contributions. First, we uncover that participants reduce spending less when given both size of the budget compared to when they are given spending separately. On the tax side, there is little variation between treatments, which aligns well with the theory that Americans have quite stable preferences for tax- ation. Secondly, we uncover that our budget tool decreases polarization considerably. Indeed, when given both sides of the budget there are very little differences on taxing and spending between conservatives and democrats.
Orion A. Lewis and Sven Steinmo | How Institutions Evolve: Evolutionary Theory and Institutional Change
This article argues that questions of gradual institutional change can be understood as an evolutionary process that can be explained through the careful application of “generalized Darwinism.” We argue that humans’ advanced cognitive capacities contribute to an evolutionary understanding of institutional change. In constantly generating new variation upon which mechanisms of selection and replication operate, cognition, cognitive schemas, and ideas become central for understanding the building of human institutions, as well as the scope and pace of their evolution. Evolutionary theories thus provide a broad theoretical framework that integrates the study of cognition, ideas, and decision-making with other literatures that focus on institutional change and human evolution.
The study of political institutions has moved back into center stage in political science. Whereas only a few years ago, institutions were mostly casually mentioned in most political science research, today they are a central focus of attention. This change is not simply a change of language or the catching on of a new popular phrase or academic fad. Instead these changes represent an important development in evolution of political science theory and intellectual focus.
The following essay surveys the history of institutionalist thought, explores several different types of institutionalist theory and suggest the central analytical agendas of modern institutionalist theory.
Sven Steinmo and Jon Watts| It's the Institutions, Stupid! Why Comprehensive National Health Insurance Always Fails in America
We argue that the United States does not have comprehensive national health insurance (NHI) because American political institutions are biased against this type of reform. The original design of a fragmented and federated national political system serving an increasingly large and diverse polity has been further fragmented by a series of political reforms beginning with the Progressive era and culminating with the congressional reforms of the mid- 1970s. This institutional structure yields enormous power to intransigent interest groups and thus makes efforts by progressive reformers such as President Clinton (and previous reform-minded presidents before him) to mount a successful NHI campaign impossible. We show how this institutional structure has shaped political strategies and political outcomes related to NHI since
Franklin D. Roosevelt. Finally, we argue that this institutional structure contributes to the antigovernment attitudes so often observed among Americans.
Do liberals and conservatives who trust the government have more similar preferences regarding the federal budget than liberals and conservatives who do not? Prior research has shown that the ideological gap over spending increases and tax cuts narrows at high levels of trust in government. We extend this litera- ture by examining whether the dampening effect of trust operates when more difficult budgetary decisions (spending cuts and tax increases) have to be made. Although related, a tax increase demands greater material and ideological sacrifice from individuals than tax cuts. The same logic can be applied to support for spending cuts. We test the trust-as-heuristic hypothesis using measures of revealed budgetary preferences from a pop- ulation-based survey containing an embedded budget simulation. Our findings show that trusting liberals and conservatives share similar preferences toward spending cuts and tax increases, adding an important empiri- cal addendum to a theory based on sacrificial costs.
There can be no gainsaying that at the end of the 20th century America is the world’s leading nation and preeminent power. America’s GNP is now greater than the total GNP of: China, Russia, the United Kingdom, France, Italy, Australia, Canada, Spain, Sweden, Denmark, Austria and Switzerland, combined. It was not simply "luck" that has made the America so rich and powerful. This essay will argue that America’s economic success has been a product of both the incredible resources found in this country and the remarkable ability of the American people to make the most of those resources. Our Constitution, and the First Amendment specifically, have played an enormous role in the evolution of both our land and our culture. As Martin Diamond suggests, it is impossible to understand America without appreciating the formative influence the Constitution has had upon it.
The paper examines the social security tax and benefit system in Japan. We offer an analysis of the interaction of taxes and benefits showing that the system has evolved to the point where it may no long fulfill the original intentions. The system today appears to redistribute income from working people who on average have lower incomes to the aged population, which today have higher incomes. We suggest the system is in need of significant reform.
Pampel Andrighetto and Sven Steinmo | How Institutions and Attitudes Shape tax Compliance: a Cross-National Experiment and Survey
Tax evasion is a problem everywhere, but it is a much bigger policy problem in some countries than it is in others. The Italian government estimates that it loses more than 27 percent of total tax revenue to evasion, whereas the Swedish government estimates their “tax gap” to be less than 9 percent. What ex-
plains this variation? We test for the importance of culturally based attitudes and institutionally structured rules for taxes and benefits through a unique set of cross-national experiments and attitudinal surveys done in multiple locations across Italy, the UK, the United States, and Sweden. Participants in each location were presented with
identical conditions based on institutional variations (tax rates, redistribution regimes, benefits) and asked to complete a survey afterward concerning their attitudes toward a number of social and political issues. A mixed-model analysis of the 2,537 subjects in our study reveals consistent influence of institutional scenarios and three attitude scales measuring pro-redistributive ideology, fiscal responsibility, and perceived government competence. Country effects, however, are more mixed and inconsistent.
Armin Schäfer et al. | Politics in Age of Austerity: Governing as an Engineering Problem: The Political Economy of Swedish Success
Sweden is once again attracting the attention of scholars and pundits from around the world because of its apparent ability to pull together high levels of economic growth and remarkably egalitarian outcomes. Indeed, in the context of the most recent economic crisis sweeping the globe, Sweden stands out as one of the most successful countries in Europe in terms of fiscal resilience and economic growth. Swedes are clearly very satisfied with their system, one that many consider among the most ‘democratic’ in the world. Certainly fiscal stress, economic com- petition and demographic change are constraining the choices available to leaders in all rich democracies, but it appears that the straightjacket has a much looser fit in Sweden. The quetion is, why?
Alexander Wendt's Quantum Mind and Social Science challenges social scientists to replace contemporary understandings of the individual and society with concepts better suited to quantum reality. This would mean replacing reductionist materialism with notions of consciousness as probabilistic, not strictly determined; and substituting, for individualistic models of society, new ones that acknowledge our connectedness to each other "at a distance," i.e., without mediation by mechanisms modeled on Newtonian physics. His challenge is welcome, for in both respects, Wendt have us replace ways of thinking that have long been inadequate to empirical reality.
Bo Rothstein and Sven Steinmo | Restructuring the Welfare State: Political Institutions and Policy Change
This volume pursues two basic themes – the first empirical, the second theoretical. Substantively, we are interested in exploring the ways in which modern welfare states have dealt with the challenges offered them at the end of the twentieth century. There are a number of forces that appear to impinge upon and challenge some of the fundamental assumptions and institutions that have been central to the welfare state for at least the last half of the century (Kuhnle 2000; Pierson 2001). Many of these challenges can be captured by the phrase "globalization" but as a number of studies have recently shown, the worst fears (or best hopes) of the "globalization" theorists have not been borne out by the facts.
Orion Lewis and Sven Steinmo | Tomemos en Serio la Evolución: Análisis Institucional y Teoría Evolutiva
Las teorías evolutivas ocupan el centro de la escena en disciplinas científicas tan diversas como la psicología, la ciencia cognitiva, la antropología, la informática, la filosofía, la lingüística, la economía y la sociología1. Como veremos, en ciencias políticas también se usa con frecuencia el término “evolución”, pero en general simplemente para hacer alusión a una vaga noción de cambio. No obstante, en los últimos años se ha renovado el interés por la teoría evolutiva en ciencias políticas y un creciente número de científicos sociales ha comenzado a pensar en forma más sistemática la teoría evolutiva y sus implicaciones para el estudio de la política y el cambio evolutivo2. Aunque nadie cree que los conceptos o teorías evolutivas desarrollados en biología o psicología se deban importar directamente a la ciencia política, existe un creciente conjunto de trabajos que señalan que los argumentos meta-teóricos que están en la base de la teoría evolutiva tienen implicaciones para la forma de estudiar la política y la historia.
Anyone who witness the current debate on health care reform in the US knows that a (or the) critical constraint on the expansion of public assistance in this area is our inability to raise sufficient funds to finance a comprehensive program–even when over 80% of the American public believe that "the government should insure that no one goes without health care because they cannot afford it" (Gallup 1979' Roper 1994). The case of health care policy is not unusual. The vast majority of public spending programs in America are widely supported by strong majorities of the public, by the politicians who sin on the committees that oversee the particular programs, and by the civiil servants that administer them. It is very clear that Americans do not like the symbol "big government." But when asked about government programs for public roads, public education, the national guard, Aid to Families with Dependent Children, the environment, public health, drugs, crime, space exploration, and virtually every other specific thing that government provides the public, large majorities of Americans say they either like the programs as they are, or want to see them increased.
Duane Swank and Sven Steinmo | The New Political Economy of Taxation in Advanced Capitalist Democracies
We articulate and test an explanation for the remarkable change and conti- nuity in contemporary tax policy in capitalist democracies. We argue that internationalization, domestic eco- nomic change, and budgetary pres- sures each prompt significant changes in tax policy; yet, together, they create a system of constraints on altering the level and distribution of tax burdens. We utilize 1981 to 1995 data from fourteen developed de- mocracies to analyze the determi- nants of taxation. We find that capital mobility and trade are associated
with cuts in statutory corporate tax rates but not with reductions in effec- tive average tax rates on capital in- come. Moreover, we find that capital mobility is negatively associated with the tax components of labor costs. Domestically, structural unemploy- ment leads to reductions in labor and capital taxes while public sector debt and societal needs raise taxes. We conclude with a summary of the new political economy of taxation in capi- talist democracies.
This chapter explores the relationship between trust and trustworthy institutions. I build on insights from social psychology, behavioural economics and institutional theory and argue that people are inclined to follow rules and behave in ways that are consistent with those rules if the rules themselves are implemented in consis‐ tent and transparent ways. We begin with an examination of why people follow rules in the first place. I argue rule-following behaviour is explained by three basic human motivations: (a) ‘self-interest’, (b) the desire to belong and (c) the need for logical consistency. The chapter then examines why political institutions that implement tax rules and laws fairly and consistently engender higher levels of compliance than institutions that seek to cater to special interests and/or particular constituencies.
The "rediscovery" of institutions has opened up an exciting research agenda in comparative politics and comparative political economy. Scholars working in different disciplines and writing on subjects as diverse as the political economy of advanced capitalism and policy-making during China's Great Leap Forward have all focused on the significance of institutional variables for explaining outcomes in their respective fields. Within comparative politics, "new" institutionalism has been especially associated with leading students of comparative political economy such as Suzanne Berger, Peter Hall, Peter Katzenstein, and Theda Skocpol, among others. Although it has now been around for several years, few have stepped back to analyze the distinctive features of the kind of historical institutionalism these theorists represent, nor to assess its strengths and overall contribution to comparative politics. These are themes we take up in this introductory chapter.
Orion Lewis and Sven Steinmo | Theory in Biosciences: Taking Evolution Seriously in Political Science
In this essay, we explore the epistemological and ontological assumptions that have been made to make political science ‘‘scientific.’’ We show how political sci- ence has generally adopted an ontologically reductionist philosophy of science derived from Newtonian physics and mechanics. This mechanical framework has encountered problems and constraints on its explanatory power, because an emphasis on equilibrium analysis is ill-suited for the study of political change. We outline the primary differ- ences between an evolutionary ontology of social science and the physics-based philosophy commonly employed. Finally, we show how evolutionary thinking adds insight into the study of political phenomena and research ques- tions that are of central importance to the field, such as preference formation.
Librarians and the library profession keep repeating that libraries contribute greatly to generating social capital by “building community”. However, little evidence of this has been presented. This paper aims to be a first step towards correcting this situation by asking whether public libraries matter in the creation of generalized trust.
This study used quantitative data in analyzing macro-level data on whether public library expenditure could explain social trust patterns in the OECD countries. Additionally, a few qualitative interviews with public library leaders in the USA and Norway were used to indicate by what mechanisms, or by which processes, libraries generate generalized trust.
Over the past several years there has been a substantial shift in ideas amongst policy elites about the proper role of government in the society and the economy. Though it is extremely difficult, if not impossible to find a corresponding dramatic change in public attitudes, policy elites now appear to believe that government both cannot, and should not, do many of the things that it once did. Ronald Reagan and Margaret Thatcher are no longer in office, but the ideas that were proposed by the Right, appear to now be a growing consensus among elite policy makers – on all sides of the political spectrum – that the state should not do many of the things that it used to do. In other words, the argument is not simply that we cannot do what was once done, but now we ought not do what was once done.
As shown by the recent crisis, tax evasion poses a significant problem for countries such as Greece, Spain and Italy. While these societies certainly possess weaker fiscal institutions as compared to other EU members, might broader cultural differences between northern and southern Europe also help to explain citizens’ (un)willingness to pay their taxes? To address this question, we conduct laboratory experiments in the UK and Italy, two countries which straddle this North-South divide. Our design allows us to examine citizens’ willing- ness to contribute to public goods via taxes while holding institutions constant. We report a surprising result: when faced with identical tax institutions, redistribution rules and audit probabilities, Italian participants are significantly more likely to comply than Britons. Overall, our findings cast doubt upon “culturalist” arguments that would attribute cross-country differ- ences in tax compliance to the lack of morality amongst southern European taxpayers.
Studies examining the effects of gender on honesty, deceptive behavior, pro-sociality, and risk aversion, often find significant differences between men and women. The present study contributes to the debate by exploiting one of the largest tax compliance experiments to date in a highly controlled environment conducted in the United States, the United Kingdom, Sweden, and Italy. Our expectation was that the differences between men’s and women’s behavior would correlate broadly with the degree of gender equality in each country. Where social, political and cultural gender equality is greater we expected behavioral differences between men and women to be smaller. In contrast, our evidence reveals that women are significantly more compliant than men in all countries. Furthermore, these patterns are quite consistent across countries in our study. In other words, the difference between men’s and women’s behavior is not significantly different in more gender neutral countries than in more traditional societies.
This essay addresses one of the broadest and most complex issues faced by students of comparative politics: Why do different democracies pursue different public policies?
I address this issue through a comparative examination of the politics and structure of taxation systems in three prominent Western democracies. Despite the paucity of literature that examines taxation from a comparative perspective, taxes provide a peculiarly appropriate arena in which to examine broad comparative questions. Taxation is at the center of ideological debate between left and right in every modern welfare state.Taxation is a critical arena in the politics of who gets what in society and who pays for it in all polities. And, finally, taxes are fundamental to the very size and functioning of government.
Matthew J. Hirschland et al. | Correcting the Record: The Real Story Behind Federal Intervention and Failure in Securing Contemporary US Educational Reform
We show here that contrary to popular rhetoric, from an early stage the American federal government demonstrated remarkable influence over not only the political and economic landscape of the developing nation but also over education as well. This occurred in spite of the fact that the institutions in support of such action were fragmented and poorly organized to accomplish national educational goals. In this light, our focus is upon how these 19th century developments set the tone for the system of education inherited today – one which heralded the widespread provision of education, but also a greatly diminished federal role that frustrates current policy innovations in terms of US education reform.