Open AccessEffects of signalling tax evasion on redistribution and voting preferences: Evidence from the Panama Papers
Author(s) -
Laila Ait Bihi Ouali
Publication year - 2020
Publication title -
plos one
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.99
H-Index - 332
ISSN - 1932-6203
DOI - 10.1371/journal.pone.0229394
Subject(s) - redistribution (election) , tax evasion , voting , panama , demographic economics , redistribution of income and wealth , economics , natural experiment , empirical evidence , evasion (ethics) , public economics , exploit , empirical research , political science , biology , politics , microeconomics , public good , medicine , ecology , philosophy , immune system , computer security , pathology , epistemology , immunology , computer science , law
This paper provides empirical evidence that individuals substantially revise their stated wealth redistribution preferences after fiscal scandals. The 2016 Panama Papers scandal revealed top-income tax evasion behaviour simultaneously worldwide. The empirical investigation exploits this event as a quasi-natural experiment. I rely on two original datasets, a UK household longitudinal dataset and a survey conducted in 22 European countries. I use a difference-in-differences strategy and find that pro-redistribution statements increased between 2% and 3.3% after the scandal. Responses are heterogeneous and larger for right-wing individuals and low-income individuals. This change in wealth redistribution preferences is likely to have been translated into a slight change in votes. The results suggest an increase in stated voting intentions for the left and a decrease for the right. Complementary estimations reveal that more media coverage and more individuals involved by country increase the magnitude of the response.