Tax Evasion in a Transition from Socialism to Capitalism: The Psychology of the Social Contract

In a common assumption of the economics of tax evasion, extending beyond the basic Allingham-Sandmo model, the choice of a taxpayer to evade taxes depends upon the perceived fairness of the tax system. The purpose of the paper is to provide a psychological foundation for this assumption by drawing on Hayek’s theory of human behavior as a process of rule following. According to the main hypothesis, taxpayers are more compliant with tax laws to which they can in principle give their full consent. A social contract as a basis of tax policy may provide a potent means to combat tax evasion particularly in transition economies that have inherited a deep mistrust of the government from their socialist past.tax evasion; social contract; economics of psychology; transition economies; Austrian economics

Endogenous preferences, emotions, and the breaking of social capital into economics

The creation and effects of social capital have seldom been a target for systematic analysis in orthodox economics. The purpose of the paper is to argue that in order to include social capital, along with physical and human, into economic analysis, we have to regard human preferences as endogenous and pay more attention to the contents rather than merely the logic of choice and decisionmaking. The paper limits itself to examining the role of trust in the formation and disruption of social capital. Emotions such as guilt and shame are central in the emergence of trust within social relations. Sources of and means to strengthen trustworthiness are examined in the context of bank loans.social capital, trust, endogenous preferences, emotions, behavioural economics, bounded rationality

The four approaches to Austrian Social Theory

Administrative Studies, vol. 10(1991): 4, 259-269Austrian economic theory is known for puttingemphasis on the division of knowledge,discoordination of plans and discovery of the unknown. The purpose of the paper is to provide anintroduction to the Austrian theory of society.Austrian economlsts have applied variousapproaches to explaining the nature of society.The only genuinely Austrian approach is theevolutionary social theory which examines thecompetition between societies as an open-endedprocess of discovering new social institutions.The contractarian, naturalistic and utilitarianapproaches have advantages of their own, butthey are of limited use because they seek good ornatural social institutions solely on the basis ofwhat is currently known to be good or natural

Evoluutioprosessien piirteitä ja vaikutuksia taloudessa

Ihmisten tietämys päätöksiinsä vaikuttavista asioista on hyvin rajoittunutta. Yhteiskunnan instituutioiden keskeinen tehtävä on tuoda ratkaisuja tähän ongelmaan. Tietämättömyyden väheneminen ja aivan uuden tiedon löytyminen saavat aikaan sosiaalisen evoluutioprosessin. Muuntelu ja valinta ovat samaan tapaan kuin biologisessa evoluutiossa sen keskeisiä piirteitä