An experimental test of two policies to increase donations to public projects

Abstract

This paper uses lab-in-the-field experiments and theory to explore why people give money to governments. We assume that giving is motivated by outcome–oriented or consequentialist norms, and conditional on (a) others’ behavior and (b) beliefs about how competent the government is. The evidence from a lab experiment in Peru is in line with this. On the other hand, we analyze the potential effects of two policies to increase giving, observing that less people give zero if they are informed about (i) two specific government projects (a subway line and a children's hospital) or (ii) that some well-known Olympic medalist pays punctually her taxes, according to public information released by the Peruvian tax Agency. Our findings contribute to a burgeoning literature on tax morale and are arguably relevant to understand taxpayers’ non-selfish reasons to pay (or evade) their taxes.