Developing countries, with limited monitoring and auditing capabilities, face significant tax evasion issues. This study examines the impact of various text message combinations on promoting tax compliance, particularly in encouraging service providers to submit monthly sales tax returns in Khyber Pakhtunkhwa, Pakistan. A randomised controlled trial involved 18,087 service providers and tested three types of SMS reminders. These included a basic reminder for the due date, a reciprocity message emphasising social responsibility, and a loss aversion (LA) message highlighting financial penalties and deactivation. Subsequently, service providers who didn’t file on time received one of three warning messages. These warnings included a basic alert about potential legal action, financial penalties, and deactivation, as well as a message framing continued non-compliance as an active choice (AC). Overall, the interventions did not significantly influence tax filing behaviour beyond basic reminders and warnings. However, compliance improved for early registrants with the LA reminder and AC warning, and these results were robust to multiple hypothesis testing corrections. Compliance worsened for recent registrants in all combinations except the LA reminder and AC warning. These findings suggest that targeted low-cost messages that convey vague threats can improve tax compliance among certain taxpayer groups.

Private refugee sponsorship is a desirable behaviour – it leads to positive outcomes for sponsors, refugees, the Canadian government and the general public. The most commonly reported motivations to sponsor are related to identity, including moral and national identity. Self-determination theory (SDT) suggests that identity is a strong intrinsic motivator; individuals who identify more strongly as a sponsor may be more intrinsically motivated to take on additional sponsorships. This proposed behavioural policy uses the components of SDT to design a certificate programme that bestows an official title on sponsors after completing a sponsorship. The certificate design reflects the three components of SDT (autonomy, competence and relatedness) and encourages moral and national incentives. Official titles are shown to increase identity with a role – titles act themselves as mechanisms of identity-building, which can lead to identity-motivated behaviours. The proposed certificate programme aligns with existing practices and resources already used by the Canadian government. It suggests that official titles could be a cost-effective mechanism for encouraging subsequent sponsorships.

We report the results of a field experiment designed to increase honest disclosure of claims at a U.S. state unemployment agency. Individuals filing claims were randomized to a message (‘nudge’) intervention, while an off-the-shelf machine learning algorithm calculated claimants’ risk for committing fraud (underreporting earnings). We study the causal effects of algorithmic targeting on the effectiveness of nudge messages: Without algorithmic targeting, the average treatment effect of the messages was insignificant; in contrast, the use of algorithmic targeting revealed significant heterogeneous treatment effects across claimants. Claimants predicted to behave unethically by the algorithm were more likely to disclose earnings when receiving a message relative to a control condition, with claimants predicted to most likely behave unethically being almost twice as likely to disclose earnings when shown a message. In addition to providing a potential blueprint for targeting more costly interventions, our study offers a novel perspective for the use and efficiency of data science in the public sector without violating citizens’ agency. However, we caution that, while algorithms can enable tailored policy, their ethical use must be ensured at all times.