Hybrid Governance in Online Drug Distribution

Abstract

A growing share of illicit drug dealing occurs on online platforms. Technological innovations, such as encryption and anonymous payments, have enabled new and more complex ways of organizing transactions. This conceptual essay advances the study of online drug dealing by describing how governance mechanisms from markets, networks, and hierarchies are combined to reduce transactional uncertainty. Based on published research, I argue that cryptomarkets and social media drug distribution prioritize prices, trust, and rules differently, and that this can be understood as hybrid governance. In cryptomarkets, networked reputation scores are important, but their reliability is interdependent of administrators’ sanctioning capacity. Similarly, the open advertisement of prices and products relies on the ability to expose fraudulent vendors. On social media, buyers prioritize easy access and fast delivery and characteristics of market governance, while hierarchical rules are absent, and networked reputations play only a small role. Existing typologies of drug dealing organization do not capture these combinations of governance mechanisms. Hybrid governance and the interdependence of several governance mechanisms better capture the empirical reality of new and emerging modes in online drug distribution.

Between street and digital capital? A qualitative study of judicial sentencing of persons convicted of online drug dealing in Sweden

“…The descriptions of the organization of the sales operations vary from hierarchical to partnerships and networks. We found that sales operations on darknet cryptomarkets and shops on the surface web were described as more hierarchically organized compared to operations based on social media platforms, which is confirmed by previous research that suggests technically advanced markets are more hierarchical (Moeller, 2022).…”

Understanding and preventing the advertisement and sale of illicit drugs to young people through social media: A multidisciplinary scoping review

“…The latest evidence suggests that choice of platform may not rest on national preferences identified in the literature but rather, it is shaped by the relationships established between individual buyers and sellers, such as perceived closeness or friendship [44]. Researching the behaviours of users will be crucial to explore how these intersect with existing organisations of online drug distribution [95] and assess their porosity with darknet markets.…”

Ranking Trust Factors Affecting Risk Perception in Illicit Drug Purchase on the Darknet: A Large-Scale Survey Study in Hungary

“…Both findings indicate that the perception of the reliability of markets and vendors determines potential customers’ decisions. The escrow system used in darknet markets provides an additional technical guarantee of payment security by depositing the price of the ordered product and releasing it upon receipt if both the vendor and the customer agree (Moeller, 2022 ). This factor was measured only as an element of guarantees, but its relevance would justify its examination as a separate trust factor if the survey would be conducted among actual darknet market users.…”