Social Norm Tax Letters
Dominican Tax Authority (DGII) · Dominican Republic · 2019
Summary
The Dominican Tax Authority randomly assigned businesses to receive letters comparing their tax compliance to similar firms. The social norm framing—showing companies how they ranked among peers—produced a dramatic revenue increase. The $184M gain was far larger than the marginal cost of the letters.
Research question
"Can social norm messaging increase tax payment among businesses?"
Methodology
Intervention
Letters comparing firm's compliance rate to peers with social norm framing
Assignment
Randomized controlled trial (firm-level)
Sample size
~100,000 firms
Primary outcome
Tax revenue paid within compliance window
Effect estimate
Treated firms paid $184 million more than controls (0.22% of GDP)
Decision
Program expanded nationally
Result
Positive
Treated firms paid $184 million more than controls (0.22% of GDP)
Evidence strength
Strong
Randomized trial, replicated across multiple sites or studies.
Replication status
Replicated
Institution
Dominican Tax Authority (DGII)
Location
Dominican Republic
Year
2019
Policy area
Tax & Revenue
Mechanism
Social norms