Orchestrating the Fight Against Anonymous Incorporation: A Field Experiment
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Findley, Michael G., Daniel Nielson, and J.C. Sharman. "Orchestrating the Fight Against Anonymous Incorporation: A Field Experiment." Forthcoming In Kenneth Abbott, Phillip Genschel, Duncan Snidal and Bernhard Zangl (Eds.) . Cambridge, UK: Cambridge University Press.
The world’s leading governments collectively fight money laundering and terrorist through the inter-governmental Financial Action Task Force (FATF). In order to prevent anonymous incorporation, one of the FATF’s most important rules requires that private corporate service providers demand certified identification documents from customers when incorporating new companies. But serious questions arise over the FATF’s effectiveness at inducing compliance with this rule. To investigate, this study employs a randomized field experiment. Using aliases and posing as consultants, we sent more than 2,500 emails requesting confidential incorporation to corporate service providers in 180 countries. We informed services about FATF rules, invoked a threat of legal penalties (hierarchy), and appealed to global norms (collaboration). We compared these treatments to a condition that attributed the standards to a private intermediary, the Association of Certified Anti-Money Laundering Specialists (ACAMS). We found that ACAMS significantly increased compliance compared to the other conditions and that information about FATF rules, legal penalties, and norms did not significantly alter the ease of anonymous incorporation. The results provide precise measurement of orchestrator incapacity and intermediary complementarity to affect target behavior, which together predict orchestration. Indeed, a case study reveals that the FATF strongly endorses private certification bodies. A fifth experimental condition, attributing the documentation standards to both ACAMS and the FATF, caused a decrease in compliance compared to ACAMS alone, suggesting that closer association of the two bodies beyond endorsement might undermine the compliance goal.
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Replication Data: See replication data for Global Shell Games book. All descriptive data reported here are drawn directly from the book's data files.
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