On the Performance‐Based Legitimacy of Financial Action Task Force: A Quantitative Exploration

ABSTRACT How legitimate is Financial Action Task Force (FATF)? We address this question with cross‐country evidence spanning performance‐wise aspects— standards, evaluation, strategy . FATF's legitimacy needs strengthening. Standards‐wise, compliance to FATF's Recommendations generally contributes to both FATF's and external effectiveness proxies, yet the latter has much weaker evidence. Granularly, FATF's Recommendations pose challenges for good‐faith developing states, since capacity constraints hinder compliance and effectiveness conversion. Evaluation‐wise , the effectiveness appraisal may be biased due to heavy reliance on compliance ratings, evidenced by weak correlations with external corruption control and financial transparency indicators. Strategy‐wise , though enhanced follow‐up boosts persistent compliance, the dominantly punitive strategy system is detrimental to good‐faith yet low‐capacity states. Theoretically, we build an extended framework on Mitchell's theory by deepening the analysis of effectiveness and justifying its applicability to non‐binding institutions. We also enrich the dialogue on the legitimacy of international organizations by presenting a quantitative, objective approach using official data.