Foucault’s Theory Of Governance And The Deterrence Of Internet Fraud

• Author: Annette D. Beresford
• DOI: 10.1177/0095399702250347
• Published date: 01 March 2003
• Date: 01 March 2003
• Subject Matter: Articles

10.1177/0095399702250347ARTICLEADMINISTRATION & SOCIETY / March 2003Beresford / INTERNET FRAUD

FOUCAULT’S THEORY OF

GOVERNANCE AND THE

DETERRENCE OF INTERNET FRAUD

ANNETTE D. BERESFORD

Florida Atlantic University

In his major works, Michel Foucaultexplored ways in which humans have been made sub-

jects throughout history—by virtue of direct governmental controland by virtue of a more

subtle power: the construction of individual identity througha design of permissible behav-

iors and thoughts. Foucaultalso explored in his works a model of governance premisedon a

hypothesisof networked relations of people, communication, and capacities for change. This

article argues that Foucault’s model of governance can be used to discover and develop

strategiesfor deterring Internet fraud through the network of relations and capacities within

the Internet community.

Keywords: Foucault; Internet; regulation; fraud; securities

Over the past decade, governmental controls overthe Internet have been

vehemently resisted, in part because the values of privacyand free speech

run counter to such controls. Unfortunately, the success of this resistance

has created an ideal environment for the proliferation of deception and

fraud. This statement suggests that governmental control and fraud are

inversely related, and the only way to reduce fraud is to increase govern-

mental control. However, the concept of governance, as described by

Michel Foucault, implies that the reduction of fraud can be addressed out-

side of this inverse relationship.

In brief, the distinctions between traditional governmental action and

governance involve the manner, or methods, of directing individual and

group conduct (Foucault, 1983). Traditional government directs the

82

AUTHOR’S NOTE:The author wishes to thank Hugh T. Miller for sharing his comments,

support, and inspiration.

ADMINISTRATION & SOCIETY, Vol. 35 No. 1, March 2003 82-103

DOI: 10.1177/0095399702250347

© 2003 Sage Publications

conduct of a population through institutions and laws, whereas Foucault’s

definition of governance includes attention to “strategic and tactical

moves, micropower techniques, and the variousmovements of power that

fly below the radar of sovereigntyand law” (Crawley & Chaloupka, 2000,

p. 30). Traditional governmentseeks to control fraud with punitive actions.

Governance, on the other hand, allows the “legitimate” forms of govern-

ment to work through individuals and groups outside of government and

to seek prevention through the communication of information and the

facilitation of nongovernmental action. It allows the institutions of govern-

ment, in cooperation with corporations and other nongovernment groups,

to “generate various kinds of compliance in persons themselves”(p. 30).

Governance, then, involvesa network of relationships among the gov-

erned and the governing, rather than a hierarchical relationship between

the governedand the governing. In this respect, Foucault’s concept of gov-

ernance is different from that of citizen participation. The process of citi-

zen participation tends to perpetuate the role of the citizen as “subject to”

the control of government, dependent on the protection of government,

and bound by an identity that is defined by a position in a social hierarchy

(Foucault, 1983). This hierarchical relationship, for Foucault,represents a

model of sovereignty based on a Divine Poweror a King. Governance, on

the other hand, requires that we “cut off the King’shead” (Foucault, 1972/

1980, p. 121) and pay attention to the ways in which we direct conduct

through the systems of the body of society, which, in essence, requires

government participation in citizen activitiesrather than citizen participa-

tion in government activities. Finally, governance requires the exercise of

power, which for Foucault entails an interplay of three types of relation-

ships within a nonhierarchical environment and inclusiveof both govern-

mental and nongovernmental groups: (a) relations (or interconnections)

between individuals and groups; (b) communication of information “by

means of language, a system of signs, or any other symbolic medium”

(Foucault, 1983, p. 217); and (c) capacities to modify action.

Using these concepts of governance, this article argues that the very

characteristics that facilitate fraud in an Internet environment are a means

for the deterrence of fraud—namely, human interconnections, communi-

cation, and the capacities of information to both enlighten and defraud.

First, section 1 frames the relationship between the Internet environ-

ment—as a dematerialized and decentralized network—and the specific

problem of Internet-related securities fraud. It also provides a brief intro-

duction to Foucault’s related concepts of power-knowledge, discipline,

and governance. Section 2 details the contextof Internet-related securities

Beresford / INTERNET FRAUD 83