Populism, federalism, and tax evasion

Organised by

• Department of Political and Social Sciences

This paper assesses the effect of populism, focusing on the rise of anti-establishment parties, on tax evasion. We investigate how the Northern League's advocacy for fiscal federalism in Italy affects compliance with the national TV tax (i.e., RAI). By exploiting a staggered difference-in-differences (DID) and a standard margin of victory regression discontinuity design (RDD), we find that participation in a local election and the victory of a Northern League mayor induces a statistically significant increase in tax evasion. We explore three potential mechanisms—direct, contagion, and media effects—to disentangle how populist and federalist ideas influence tax evasion behavior. We do so by following anti-tax propaganda actions the Northern League party took locally, exploiting newspaper data. Overall, preliminary findings emphasize the need to account for political dynamics, particularly the rise of populist movements, when studying patterns of tax evasion in a setting of federalist ideologies.

The Zoom link will be sent upon registration.