When questioned for the research, 37% of respondents said littering was sometimes or always acceptable.
One in five admitted dropping litter in the past year, with young males in urban areas most likely to do so.
But the report complains that the battle against litter is not being fought in a co-ordinated manner.
It says enforcement measures such as penalty fines need to be more consistent nationwide.
Author Bill Bryson is calling for action
However, it points out that incentive schemes have been successful in other countries - for instance, a programme in the US state of New York State which offered a small deposit back on drinks bottles and cans reduced roadside litter by 70%
It also suggests better design of public spaces, placing bins and ashtrays more thoughtfully and a national body to co-ordinate anti-litter campaigns and initiatives.
Ben Caldecott, Head of Policy Exchange's Environment and Energy Unit, said simple, cheap strategies like providing more bins could easily be put into place.
He added: "Over time, if we better educate people and stop the perception that litter is somehow 'someone else's problem', then we can get to the root causes of this blight on our towns and countryside."
Mr Bryson said fines were "an essential enforcement tool" to tackle litter.
"As this report also says, we need community buy-in to the fight against litter; we must build civic pride in clean and tidy environments, with communities competing to be spotless," he added.
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