In: Review of International Political Economy. (Submitted)

This paper investigates the legitimation strategies of financial Transgovernmental Networks (TGNs), challenging the prevailing assumption that they rely solely on claims of output legitimacy derived from technical expertise and effectiveness in maintaining financial stability. While central banks and national financial regulators have historically operated with a degree of independence, the post-2008 financial crisis era has seen increasing politicization and calls for greater democratic accountability, even prompting central banks to engage more directly with the public. We explore whether financial TGNs, despite their traditionally opaque and technocratic nature, have similarly adapted by embracing more open and participatory processes to enhance their input and throughput legitimacy. Our empirical analysis, focusing on both EU and global financial TGNs, reveals a more complex picture than the conventional “legitimacy deficit” narrative suggests. While output legitimacy remains a significant mode, particularly given the market as a key audience, our findings demonstrate robust evidence of financial TGNs actively pursuing input and throughput legitimacy, especially within the European context. European TGNs consistently exhibit higher democratic governance scores, though global networks show more heterogeneity. Furthermore, the study uncovers an unexpected role for technocracy: networks with a higher proportion of central bankers, particularly at the global level, appear to be more resilient to politicization’s negative effects on democratic governance, by upholding procedural integrity. This suggests that central bankers strategically engage with democratic governance mechanisms to bolster their authority. Ultimately, the research indicates that financial TGNs are not monolithic technocracies, but rather dynamic entities increasingly navigating the complex demands of both market efficiency and democratic accountability to secure their “right to rule” in global financial governance.

You can access the whole article here.