Can Facebook Ads and Email Messages Increase Fiscal Capacity? Experimental Evidence from Venezuela

Jorge Gallego, Federico Ortega

Research output: Contribution to journalResearch Articlepeer-review

1 Scopus citations

Abstract

Tax compliance is an important challenge in weakly institutionalized countries, especially when fiscal capacity is limited. E-government platforms, which have become popular in recent years, provide governments with more and better taxpayer information, allowing new forms of communication with citizens. In particular, social media targeted advertising may be used by tax authorities to increase tax compliance. We performed a randomized field experiment in the capital of Venezuela, Caracas, to determine whether targeted Facebook ads help the local government reduce tax delinquency. Our design allows us to test for complementarities between ads and email reminders, which may boost the capacity of the tax authority to increase compliance. We find that these online strategies are cost-effective methods for increasing tax revenues but that the effects vary across different types of taxpayers, especially concerning the combined email and Facebook treatment.

Original languageEnglish (US)
Pages (from-to)1531-1563
Number of pages33
JournalEconomic Development and Cultural Change
Volume70
Issue number4
DOIs
StatePublished - Jul 2022

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics

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