‘Motivation Spillover’: Tax Policy Designed to Mobilise Collective Action

Abstract

Instrumental citizens have no incentive to vote because a single vote has only a minuscule chance of changing an electoral outcome. as individuals’ motivation to vote is to express identity with values signalled by policy, there are incentives to design tax policy to appeal to expressive voters. the objective in this paper is to consider the implications for public finance management if policy preference and taxpayer response are sensitive to perceptions of the intrinsic value of expressive action. If policy is designed to emit low-cost signals that inform perceptions of the intrinsic value of expressive action, taxpayer response will depend on more than the impact that tax exerts on budget constraints (e.g. on relative price and on income). Policy design features are capable of mobilising collective action to achieve outcomes that would otherwise remain ‘undersupplied’ (in terms of individuals’ own preferences). Tax policy can be designed to achieve more than the sum of instrumental response (to tax, subsidy and regulation).