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This paper outlines the overlap between social psychology, taxation and government spending; an area referred to as ‘fiscal psychology’. Attention is drawn to the tendency of many public economists to ignore the intervening variables between economic stimuli and economic response. These intervening variables are largely attitudinal and could be used to improve economic predictions, understanding of the effects of taxes on work effort, the tendency to evade taxes and more generally, the relationship between taxpayer and government. Fiscal psychology also incorporates familiar approaches in social psychology including equity, intergroup relations, and attribution theory, and debates about attitude structure and the attitudes/behaviour link. Comment is additionally made on the importance of assessing taxpayers' preferences for government spending, and their influence on government fiscal policy as well as their reaction to it. This is done in the light, here as elsewhere, of the discussion as to the ‘descriptive’ or ‘prescriptive’ nature of social psychology in the real world.

This paper reports on a questionnaire survey of 1146 ethical investors in the UK. Ethical investing usually means that certain companies are excluded from one's portfolio on non-economic grounds, e.g. because they manufacture armaments, test chemicals on live animals, or have poor pollution records. Is this an example where moral commitment rather than economics is driving economic decision making? Ethical investors were found to be neither cranks nor saints holding both ethical and not so ethical investments at the same time. A case is made that people are prepared to put their money where their morals are although there is no straightforward trade-off between principles and money. A broader analysis than that based on rational economic man is recommended: an economic psychology.

For more than 15 years, the investment community and the academic community have written extensively on socially responsible investment (SRI). Despite the abundance of SRI thought, the adoption of SRI practices among institutional investors is a comparative rarity. This paper endeavours to achieve two goals. First, by integrating the practitioner and academic literature on the topic, the paper attempts to identify the many impediments to SRI in Europe from an institutional investor's perspective. Second, the paper proposes a unitary framework to conceptually organize the impediments to SRI by using insights from different relevant research perspectives: behavioural finance, organizational behaviour, institutional theory, economic sociology, management science and finance. The paper concludes by presenting the main shortcomings within both the academic and the practitioner literature on SRI and by providing conceptual and methodological recommendations for further research.

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