How Do Crop Producers React to a Perceived Absence of a Level Playing Field?

Compliance research has paid relatively little attention to the way businesses react to offenses of other businesses, and to the absence of enforcement against these businesses. This study investigates both these aspects of compliance behavior with a qualitative approach. We ask what role compliance motives and their cultural context play in the way two types of Dutch horticulture producers (glass and soil) deal with information about the absence of enforcement against tax offending businesses. The case selection is based on indications that both types of producers are embedded in different sector cultures with a demarcation line between producers who have chosen to participate in a voluntary tax compliance program and those who have not. The study shows that economic motives, sometimes in combination with normative motivations and social pressure, influence producer’s reactions to the absence of enforcement against other businesses, but contrary to our expectations, these reactions are often not aimed to reduce the cost of compliance. In addition, their reaction is related, as expected, to cultural differences between both sectors, but contrary to the expectation, the demarcation lines have no relation with the voluntary tax compliance program. In sum: compliance motives as well as sector culture play a role in producer’s reactions to the absence of enforcement against offending businesses, but in a different way than can be expected on the basis of the literature.