Citizens have expectations about what they expect will, or should, happen when interacting with the state. Expectations affect citizens’ satisfaction, including lowering satisfaction when perceived performance fails to meet expectations (for a review see Zhang et al. 2022). However, little research has focused directly on attempts by public managers to ‘manage’ citizens’ expectations about these interactions. We focus on part of the social contract between citizens and the state, the filing of tax returns, and manage predictive expectations about the time it will take to complete the filing process. Time matters because it is a form of administrative burden (Madsen, Mikkelsen and Moynihan 2022) that is widely recognised by governments (for example in the US Paperwork Reduction Act), and satisfaction of citizens paying tax is important because it can affect the legitimacy of tax systems and potentially affect their tax compliance.

We hypothesise that setting expectations for a shorter time to complete raises satisfaction, but failing to meet these expectations will backfire and lower satisfaction. In a preregistered online survey experiment in the UK (n= 1,500), we manage expectations of time to undertake a realistic income tax form process. We then engage participants in the form task and experimentally vary the actual performance so that the time is the same as, greater than or less than the time expected to complete the task. Afterwards we ask participants about their satisfaction with the task. We hypothesise that, overall, setting an expectation that the time will be shorter raises satisfaction compared to setting an expectation that it will be longer. We further hypothesis that actual performance of the task being longer than expected lowers satisfaction, and that performance of the task being shorter than expected raises satisfaction. We also hypothesise a direct effect of performance on satisfaction, that shorter performance time will raise satisfaction, and compare managing expectations with not making the expected time to complete the task explicit. The results will be available before Sept 2024 and we will set out the implications for expectations, performance and satisfaction, and implications for behavioural public administration theory (Grimmelikhuijsen et al. 2017) informed design of administrative systems that seek to manage users’ expectations.

Grimmelikhuijsen, S., Jilke, S., Olsen, A. L., & Tummers, L. (2017). Behavioral public administration: Combining insights from public administration and psychology. Public Administration Review, 77(1), 45-56.

Madsen, J. K., Mikkelsen, K. S., & Moynihan, D. P. 2022. ‘Burdens, sludge, ordeals, red tape, oh my!: A user's guide to the study of frictions’. Public Administration, 100(2), 375-393.

Zhang, J., Chen, W., Petrovsky, N., & Walker, R. M. 2022. ‘The expectancy‐disconfirmation model and citizen satisfaction with public services: A meta‐analysis and an agenda for best practice’, Public Administration Review 82(1):147-159.

The Brazilian government create in 2009 a public policy for productive inclusion called individual microentrepreneur – MEI (acronym in Portuguese). This policy promotes a movement to formalize informal entrepreneurs. The results has been successful, evidenced by the significant growth in registrations. As of December 2023, approximately 15.7 million MEI had been formalized, according to data from Brazilian Federal Revenue. Established by Brazilian Complementary Law 128/2008, the MEI functions as an Individual Entrepreneur, with permission for an annual turnover of up to R$ 81,000.00 (Brazilian reais), approximately US$ 16,000.00.

The advantages include a simplified registration process, ease of online formalization, simplified accounting obligations, exemption from fees related to opening and operation, and access to a specific tax regime. This legal mechanism, if maintained regularly, guarantees social security rights such as retirement, health assistance, maternity leave, and other incentives such as support from the Brazilian Micro and Small Business Support Service and facilitated credit lines for individual entrepreneurs. Regarding the tax regime, the MEI makes monthly payments through a payment slip issued by the Brazilian central government, called the Simplified Collection Declaration. This payment slip corresponds to 5% of the prevailing minimum wage in the country, destined for social security collection, with additional fees of up to R$ 6.00 (six Brazilian reais, approximately one American dollar) for tax collection by subnational governments. In case of non-payment, access to benefits such as social security, issuance of tax invoices, and suspension of the National Register of Legal Entities is prevented.

However, despite the available tax benefits and incentives, a significant proportion of MEI still do not regularly fulfill their tax obligations. On average, 45.7% of MEIs did not make the payment of the tax on the monthly due date throughout 2023, with a similar average to that observed in 2022, which was 47.2% according to Brazilian Federal Revenue. Faced with this situation, policymakers main concern lies in understanding the causes of tax delinquency among MEI.

The aim of this article is to identify, systematize, and formulate hypotheses that explore the causes of tax delinquency behavior among Individual Microentrepreneurs (MEI) in Brazil. Among developing countries, Brazil has one of the highest rates of tax delinquency. Looking at the fiscal-tax policies with a high delinquency rate, MEI stands out. This work conducted a literature review, a workshop to gather insights from managers and experts from Brazilian states and a survey with more than 4 thousands microentrepreneurs. The contribution of this research lies in the identification, systematization, and understanding of these hypotheses, knowledge that is important for policymakers in designing public policies and improving procedures related to the payment of tax guides by MEI.

Regarding the causes of delinquency discussed in the literature, we highlight relevant results from various studies. Among them, we identified factors such as forgetfulness and lack of familiarity with the consequences of not paying tax. Although some studies suggest that knowledge of the consequences is not sufficient to ensure payment, other contextual aspects, such as financial difficulties and lack of time, also emerge as important causes. Present-focused temporal orientation is also identified as influential, as well as decision overload faced by MEIs, which directly impacts their monthly tax payment decision.

As for the perceptions and observations of the organization managers, we identified a variety of viewpoints. From the analysis of these perceptions, challenges and issues emerged, such as difficulty in separating personal finances from business finances, lack of qualification and knowledge, and issues related to process management, with a focus on the MEIs' difficulty in managing their activities and their reactive and inertial behavior. Disinterest in actions that do not provide immediate benefits (known as present bias), as well as low comprehension and lack of awareness of legal obligations, were also observed in the managers' perceptions. Lastly, the managers highlighted issues related to the self-perception of MEIs, including how they see themselves and the confidence they have in themselves to manage a business.

Based on the results obtained, we conducted an exploratory exercise to identify behavioral hypotheses in the literature, resulting in 10 hypotheses. These hypotheses were confronted with empirical data obtained in the workshop with SEBRAE managers and with the 13 hypotheses developed from the identified perceptions. In the end, we present a set of 7 (seven) behavioral hypotheses that converge between the literature and empirical inputs: (i) Individuals face decision overload; (ii) Individuals forget to fulfill their tax obligations; (iii) Individuals do not prioritize taxes; (iv) Individuals have a present-focused temporal orientation, prioritizing immediate benefits; (v) Individuals have little knowledge of the consequences of delinquency; (vi) Individuals adopt a passive stance regarding knowledge of the consequences of delinquency; and, (vii) Individuals understand that entrepreneurship is a temporary situation.

In addition, an analysis of a survey answered by more than four thousand microentrepreneurs in being conducted. The final paper will include this results.

Background

In 2022, an agreement was reached with the Dutch House of Representatives to explore the development of a new system for non-compliance penalties that would benefit both society and individuals. As a result, the Dutch Tax Administration commissioned the Knowledge Centre Psychology and Economic Behaviour at Leiden University to investigate the effectiveness of these penalties.

Literature Review

Beyond traditional non-compliance penalties, the Dutch Tax Administration is also interested in the effectiveness of alternative enforcement methods, such as rewards. As part of this research, we conducted two literature reviews to assess what the scientific literature reveals about the functioning and effectiveness of both non-compliance penalties and rewards.

Online Experimental Studies

The Knowledge Centre also conducted several online experiments to explore whether rewards and non-compliance penalties influence tax compliance among Dutch citizens. This presentation will focus on two key experiments: one examining the impact of symbolic and material rewards, and another investigating the effect of ambiguous audit probabilities on tax compliance.

Conclusion

Understanding the effectiveness of different enforcement techniques is crucial for policymakers at tax authorities. Our research provides a comprehensive overview of existing studies and introduces new insights into the field.

The Covid pandemic entailed most employees in many countries being mandated to work from home. This was revolutionary in its scale although improvements digital technologies and expanding workloads had led to increasing working from home (WFH), for managers in particular. The new working from home for white-collar employees was, however, unprecedented in its scale and, further, led to continued WFH, particularly in a hybrid (home-office) form.

This was particularly salient for parts of the UK public sector, such as central government, where there had been moves to decentralise out of London. This implied new ways of working, possibly hybrid. However, the new reality of home/hybrid working meant that there were new challenges both for managing and organising these new forms of work and for the managers themselves. Previously work had been almost exclusively office based for public sector employees, the new working regime dispensed with a strong ethos of presenteeism in organizations. However, public organisations could also now recruit from a far larger talent pool. It also, however, provided challenges for employees: how would they cope with home, rather than office-based work. It also posed other questions: how would, for example, different demographics perceive home-based work. A large proportion of the public sector workforce are, for example, female for whom homeworking would potentially benefit, particularly those with caring responsibilities (Farrell et al. 2025).

This paper reports on five diverse case studies drawn from organisations in the UKs public sector including from health, a university and the UKs Civil Service and interviews with a selection of ten mid-level managers from each. Certain organizations already had some homeworking and so the respondents coped better with the new ways of work. There were, however, a series of benefits and disadvantages for both the organisations and their managers. Further, the responses differed, partly based on the jobs that they did (for example, seniority) and the demographic characteristics of respondents (for example, their age, gender, whether they had young children). However, three key findings emerge. First there were difficult organisational issues to face. Second, the individual managers mainly displayed both positive and negative responses to homeworking. Third, managerial attitudes to themselves homeworking were not always based on demographics.

Farrell, C., Hassard, J. and Morris, J. (2024) Gender and Homeworking in Covid. Economic and Industrial Democracy

Hassard, J. and Morris, J. (2024) Is homeworking new? Organization Studies.