Bureaucracy-legislature dynamics with the intervention of a multilateral institution: The making of the anti-money laundering law

Date of Publication


Document Type


Degree Name

Doctor of Philosophy in Development Studies (Research)

Subject Categories

Criminal Law


College of Liberal Arts


Political Science


The policy making of the anti-money laundering law in the Philippines is about the dynamics between the bureaucracy and the legislature on the domestic arena, and a multilateral institution intervening from the outside. Before the FATF's involvement, the domestic actors were uncommitted actors. Despite the existence of political obligations on the part of the government to enact the anti-money laundering law, the bureaucrats and the legislators have shown strong apathy to its legislation. This bureaucracy-legislature’s behavior was anchored on three critical factors: (1) the anti-money laundering law has direct repercussion on the interest of influential domestic actors (2) the international accords have no compelling sanctions for penalizing noncompliance and (3) the prevailing jingoistic sentiment among some legislators. When the multilateral institution came into the picture, the dynamics among the actors significantly changed. The FATF's intercession, via the blacklist, the deadlines, the global standard and the threat of countermeasures, transformed the comportment and stance of the domestic actors. These actions became compelling since the FATF (1) showed resoluteness, (2) enjoyed international support, and (3) gained legitimacy via the transparency of its actions. The transformation was relatively immediate for the bureaucracy (from apathy to determined involvement) and gradually progressing for the legislature (from intransigence, satisficing conformity to full compliance). The bureaucracy's positional change was influenced by the following factors: (1) the bureaucrats' attachment to the Presidency (2) the bureaucrats' function of improving the economy (3) the bureaucrats' intention of not alienating the interest groups and (4) the bureaucrats' aim of increasing their powers. The legislature positional change was, early on, influenced by its intent of reconciling two forces--(1) the pressure among its members and their patrons that was intensely against the legislation of the law, and (2) the pressure from the President-Bureaucracy and the interest groups that were strongly pushing for the law— and later on, shaped by its realization that (1) the economic and (2) the political cost of defying the FATF was very high. The dynamics in the legislature was further complicated by the inherent characteristics— the status quo bias and the oligarchic dominance— prevailing in the institution. Overall, the actors’ behavior in the policy making process was buoyed by the FATF’s intervention. Moreover, the policy making of the AMLA revealed four interlinked elements: (1) a contentious public good, (2) an oligarchic-controlled legislature, (3) a strong external intervention and (4) an integrated global financial system. The AMLA, as a contentious public good, was enacted by an oligarchic-controlled legislature because of the presence of persistent domestic and external pressures which isolated the institution and led to its gradual mobility in legislating a global-standard-conforming AMLA. Thus, the legislation and amendment of the AMLA rendered that the entry of a multilateral institution in the policy making equation significantly altered the dynamics among the domestic actors, and in turn, made it feasible for government to enact a more public regarding law. The AMLA case refashioned the discourse on multilateral institutions by underscoring, first, its constructive dimension in legislative politics, and second, the importance of politics in policy making— as having a good policy proposal is not enough, the key is enacting the policy with all its critical provisions intact.

The study espoused a pluralist perspective (instead of the dominant weak state-elitist perspective) and utilized a case study research design. The pluralist perspective, by assuming the diversity and autonomy among the actors, could better account on two fronts: the actors' behavior and the multilateral institution's effect. Using information-oriented sampling, the case— the legislation of RA 9160 and its amendment RA 9194--was strategically chosen to draw out critical information for analysis. Documentary and content analysis were the research methods utilized in analyzing the data. The analysis was guided by the inquiry's central proposition— the intervention of a multilateral institution in the legislation process is likely to affect the bureaucracy-legislature dynamics which would bring about a more public regarding financial regulation policy. Accordingly, the data analysis was presented via following objectives: (1) assessing the FATF's intervention the legislation of the anti-money laundering law (2) determining the FATF's effect on the dynamics between the bureaucracy and the legislature and (3) evaluating the FATF's influence in shaping the substance of the law.

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Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall


Money laundering—Law and legislation--Philippines; Bureaucracy; Financial Action Task Force

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