Besides conferences policy as u/dojoteef mentioned, you may be reviewing for a journal that does not have an explicit rule for that. In this case, you may find some papers that have been in Arxiv for a long time and not published anywhere else, but they are considered as references to many, such as CPC for example. In this case, I guess it is Ok to ask to consider such papers.

However, if this is not the case and the paper is recent, it may not be a good idea. But eventually, it is left to your judgment as a reviewer; an expert in the domain.

You may also ask the authors to consider an Arxiv paper, but not make it the basis of your yes/no decision.