AI-Assisted Surveillance, Illicit Digital Economies, and Hybrid Digital Governance Failure in Cambodia

Abstract

Cambodia presents a revealing case for public management scholarship by combining rapid AI-assisted surveillance expansion with large-scale illicit digital economies. Over the past decade, the state has enhanced its monitoring capacity through attempted centralized internet routing and facial-recognition systems, aligning with data-intensive “digital-era governance” (Dunleavy et al. 2006). Paradoxically, Cambodia simultaneously emerged as a regional hub for cyber-fraud, trafficking, and crypto-laundering. This paper argues these developments represent a hybrid digital governance order where surveillance and illicit accumulation coexist through political protection, selective enforcement, and institutional fragmentation. These dynamics reflect challenges in accountability and formal control under complex governance arrangements (Kettl 2002; Bovens 2007). The Huione ecosystem demonstrates how digital payment infrastructure facilitates transnational laundering while remaining insulated from domestic oversight, highlighting the role of regulatory intermediaries (Black 2008). Furthermore, the Prince Group case illustrates how elite networks blur the boundaries between licit investment and illicit enabling, capturing governance networks (Rhodes 1997). The analysis concludes that effective responses require institutional reforms to constrain selective enforcement and strengthen cross-border regulatory cooperation. Such reforms must prioritize public value and accountability without further expanding authoritarian surveillance under the guise of maintaining digital stability (Ansell and Gash 2008; Torfing et al. 2012).