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Abstract from

The Influence of Culture on Fiscal Corruption: Evidence across Countries

Grant Richardson is an Assistant Professor in the Department of Accountancy, City University of Hong Kong. He is a member of the Panel of the Board of Review (Inland Revenue Ordinance) for the Hong Kong Special Administrative Region of the People’s Republic of China and Fellow of the Taxation Law and Policy Research Institute, Monash University, Australia. He researches in the areas of individual, corporate and international taxation using empirical methods.

Fiscal corruption is a serious concern in many countries. There is a paucity of cross-country empirical research which directly considers the influence of culture on fiscal corruption. This study investigates the influence of culture on fiscal corruption across countries. It unpackages cul­ture in terms of Hofstede’s (1980) power distance, individualism, uncertainty avoidance and masculinity cultural dimensions, develops hypo­theses which consider their relationship with fiscal corruption, and tests these using ordinary least squares regression analysis. Overall, the results show that the higher the level of power distance and uncertainty avoidance and the lower the level of economic development, democracy and government size in a country, the higher is the level of fiscal cor­ruption. These results are useful for governments in assessing the likeli­hood of fiscal corruption from cultural, economic and political perspec­tives and in developing tax reform measures to reduce fiscal corruption.

(2006) 24 No 2 Law in Context 124-142

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