Unveiling Propriety, Validity and Consensus: A Multi‐level Examination of Legitimacy Following the Global Financial Crisis

Previous work on legitimacy has conceptualized its multi‐level nature, encompassing individual‐level propriety and collective‐level validity. Recently, scholars have introduced the construct of consensus, the degree to which evaluators agree in terms of their propriety beliefs. While validity and consensus can overlap, they can also manifest distinctly, with validity masking underlying disagreement (i.e., low consensus). Furthermore, some work has begun to theorize the effects of this validity‐consensus incongruity from a multi‐level perspective, but it has yet to systematically integrate micro‐oriented theory to explain how evaluators assess legitimacy. We address this limitation by examining the individual‐level consequences of the validity‐consensus incongruity following a negative shock. Specifically, using a multi‐level regression discontinuity design and data from 6260 evaluators across 17 countries, we examine changes in evaluators' propriety beliefs about the legitimacy of free markets following the 2008 global financial crisis. In contrast to prior research, we theorize that high validity amplifies a shock's negative impact on evaluators' propriety beliefs. In addition, we establish how consensus explains variation in evaluators' responses to a shock, particularly in high‐validity, low‐consensus contexts. By bringing together two important strands of the legitimacy literature, we extend prior theory and pioneer an empirical test of the nuanced nature of legitimacy.