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Democracies in Action: A Foucaultian Perspective on British and French Tax Enforcement

Coralie RAFFENNE et Marika TOUMI


Théoriser sur la démocratie conduit à l’envisager comme un idéal abstrait et universel, un concept fondateur désincarné. La démocratie doit également être appréhendée comme une pratique discursive mêlant pouvoir et savoir, complexe et enracinée dans un contexte socio-culturel particulier. En effet, le concept de « gouvernementalité » élaboré par Michel Foucault nous permet d’appréhender la Démocratie comme le produit culturel, diversifié et concret, de rapports de pouvoir. Les spécificités culturelles, temporelles, contextuelles de la Democratie se révèlent par exemple au travers des relations entre l’administration fiscale et les grandes entreprises. Sous les apparences d’un encadrement juridique strict se dévoilent des pratiques de pouvoir contingentes et variables que l’on peut comparer. Ainsi, la Démocratie en France révèle une attitude toute différente à la question du respect des règles fiscales et du dialogue possible entre administration et grandes entreprises, que celle adoptée dans le cadre démocratique britannique. La possibilité de faire accepter l’imposition est au cœur du dispositif fiscal britannique. En France, la relation entre le Fisc et les grandes entreprises se caractérise par une volonté de dominer et contrôler le contribuable et ne laisse aucune place au dialogue.

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I. Fiscal rules at the intersection of juridical power, discipline and government.

  • 1  Foucault connects the development of fields of knowledge with that of power relations (hence the p (...)

1Although Foucault’s focus has never been the study of legal rules, his genealogy of power is very relevant to any critical and original questioning of law and politics. Foucault’s genealogy of power identifies three forms of power-knowledge formations: Juridical Sovereignty, Discipline, and Government. These power-knowledge formations will be briefly presented here to explain their operation in modern liberal democracies.1

2The differences between sovereignty, discipline and government have been described as follows:

  • 2  Dean, M. (1999). Governmentality - Power and Rule in Modern Society, Sage, p. 20

“The object of sovereign power is the exercise of authority over the subjects of the state within a definite territory e.g. (…) levying of taxes…The object of disciplinary power is the regulation and ordering of the numbers of people within that territory…The new object of government, by contrast, regards these subjects, and the forces and capacities of living individuals, as members of a population, as resources to be fostered, to be used and optimized.”2

3The emergence of government and governmentality as a new way of thinking about the exercise of power from the seventeenth century onwards did not replace expressions of sovereign and disciplinary power but incorporated them to serve new ends through new techniques and knowledges.

  • 3  Dean, M. (1999), pp. 20-21.

“While governmentality retains and utilizes the techniques, rationalities and institutions characteristic of both sovereignty and discipline, it departs from them and seeks to re-inscribe and recode them.”3

4Law, as the expression of sovereign power par excellence is thus recast within a disciplinary and governmental perspective. It is through taxation that the power of the sovereign found its perfect expression. Fiscal rule-making and compliance was at the heart of the monarch’s representation and exercise of power. The evolution of monarchical rule and the emergence of democracy changed the object and ways through which taxation found its expression and efficiency, without displacing its central role and the organization of the state. As with other fields, disciplinary techniques and governmentalisation changed the levying of taxes into fiscal regulation. In section II, we propose to explore this historical evolution through the specificities of both English and French fiscal cultures. This historical approach will enable us to better understand the features of two very different models of fiscal compliance, incorporated in a wider administrative and governmental apparatus. Indeed, governmentality can also be understood as a collective mentality of modern rule which varies according to a specific cultural and social legacy. Our argument here is that the variations between modern European democracies illustrated in this paper by the diverging French and English models of tax enforcement, are actually variations in governmentality.

A. Juridical sovereignty and tax

  • 4  Dean, M. (1999).

5What does Foucault actually understand by this notion of a “juridical sovereignty”? Foucault “seems to use the term both to describe a discursive understanding of power...and to describe a particular network of power.”The juridical code is a discursive formation which once was articulated to a juridical network and organisation of power, that of the Sovereign. “The juridical, for Ewald, is a ‘code that enabled monarchical power to constitute itself’”.4 This juridical code has greatly influenced the traditional vision of law. However, Foucault argues that this code is insufficient to understand the operation of modern power and government and has to be completed by two important and modern forms of power with which law is now articulated: government and discipline.

6One of the issues raised by this paper is to consider how taxation has been inscribed in this juridical code in France and in England. Indeed, taxation and the administrative apparatus for its enforcement are at the very heart of the juridical code both in France and in England. However, the way they are historically inscribed in the exercise of juridical power differs. The translation of these theoretical insights into our reflection on Democracy and tax enforcement will be undertaken in section II below. Suffice to say for now that English taxation found its juridical expression through legal formalism, whilst French taxation was inscribed within the framework of a strongly hierarchical relationship between the State and the taxpayer.

7Formalism is based on an understanding of Law as a rational programme of rules, operating within a legal system that is conceived as being autonomous from other spheres and where legal rules are determinate. Formalistic legality emphasises procedure, uniformity, consistency, and formally-defined rules are granted an immanent moral rationality that enables them to operate independently from those in charge of applying the rule, or those whose conduct the rule is destined to govern.

8The formalist doctrine has long been a pillar of Britain’s constitutional and democratic identity, with its conceptualisation through the Rule of Law. The doctrine re-inscribed juridical power in the democratic context and its main function is to legitimise juridical power through its representation as rational, uniform and neutral. Law, once the embodiment of the Sovereign’s command, had become in the democratic context the expression of an abstract Rationality of rule, a guarantee against arbitrariness and abuse of power. Procedural and formal rules were understood as creating strict boundaries between legal and illegal behaviour but also between legislative, executive and judicial branches of power. Indeed, statutory rules seemed a better guarantee against the arbitrariness of common law rules made by judges. Statutory fiscal rules embodied legal formalism more effectively than the doctrine of precedent.They were seen as protections against the much-feared administrative discretion or usurpation of the law-making power by judges. Underlying legal formalism is the representation of sovereign power through its legal expression, as unitary, just and rational in order to place it beyond challenge and to establish its supremacy and sovereignty over other forms of power.

9By contrast, legal formalism occupies a less prominent position in the French system where historically and politically, the rule of law has developed to be understood more in disciplinary rather than juridical terms. Moreover, in the French system, the law-making power of the judges is traditionally and historically less threatening and more limited.

B. Tax and panoptic discipline

  • 5  Foucault, M. (1977). Discipline and Punish, London, Penguin Books.
  • 6  Foucault, M. (1977), p. 201.

10Foucault’s considerable work on disciplinary power does not seem to be immediately relevant to a study of fiscal regulation. Indeed, his empirical bases were the Prison and Psychiatry. However, it is within his study of disciplinary techniques that he refers to Bentham’s Panoptic dream.5 Bentham’s Panopticon is an idealised architectural schema organising power through the principle of visibility. Bentham imagined a system of surveillance applicable to the Prison or any kind of institution requiring normalised behaviour: a Tower, where invisible inspectors would watch the activity of citizens. This central Gaze would generate disciplined and normalised behaviour by those who, feeling constantly watched, would “internalise” the normalising expectations of the central Gaze. The major effect of the Panopticon is “to induce in the inmate a state of conscious and permanent visibility that assures the automatic functioning of power”. 6

  • 7  Foucault, M. (1977), p. 206.
  • 8  Foucault, M. (1977), p. 209.

11 Panopticism is associated with the problematisation of efficient power, be it disciplinary or governmental. “The panoptic schema makes any apparatus of power more intense: it assures its economy (in material, in personnel, in time); it assures its efficacy by its preventative character, its continuous functioning and its automatic mechanisms. It is a way of obtaining from power ‘in hitherto unexampled quantity’, ‘a great new instrument of government’ ...(Bentham, 66).”7 Panopticism is “a functional mechanism that must improve the exercise of power by making it lighter, more rapid, more effective...”8 The goal is to create useful and efficient individuals.

  • 9  The contrast of the gaze and the cage is borrowed from Picciotto, S., “Constitutionalizing Multile (...)

12We argue here that the panoptic mentality of rule has been a strong influence in shaping French democratic institutions and its tax system. We will present historical evidence below that the political circumstances in Ancien Régime France that led to the choice of the regulatory logic of command and control in Taxation with extreme administrative centralisation, also represented a fertile ground on which the concept of panoptic discipline could take roots in the post-revolutionary era. The extensive network of tax agents represented a culture of surveillance that emphasised inquisitive and intrusive methods, such as on site audits (contrôles fiscaux) for compliance. This approach of the gaze was favoured over that of the cage of formal legality preferred in Britain.9

C. Fiscal regulation and governmentality

13The Foucaultian neologism ‘Governmentality’ was invented to describe and constitute the mentality of governmental rule as an object of theoretical analysis. Foucault defines Governmentality as :

  • 10  “Governmentality”, lecture given in 1978 and published in The Foucault Effect: Studies in Governme (...)

“The ensemble formed by the institutions, procedures, analyses and reflections, the calculations and tactics that allow the exercise of this very specific albeit complex form of power [(government)], which has as its target population, as its principal form of knowledge political economy, and as its essential technical means apparatuses of security.”10

14Governmentality is a combination of rationalities and techniques concerned with the understanding, construction and exercise of government as a form of power. Foucault’s understanding of government is broad and is not limited to the exercise of the legislative power. Law is only one of the possible instruments of government, which can also involve power relations between individuals. Such assemblages vary across time but also across cultures as governmentality can be understood as a collective rationality embedded in common governmental practices. Hence, variations in practices are necessarily connected to variations in collective rationalities and values.

15Within this perspective of Governmentality, law, and specifically here fiscal regulation, is both an instrument amongst others and a discourse set in and determined by Governmentality. Law regulates or guides behaviour and participates in the construction of society. Governmentality does not operate completely independently from sovereignty and discipline. Fiscal rules and regulatory practices indeed reflect a particular form of governmentality, which has incorporated, at different levels and to variable degrees, culturally-specific expressions of sovereign and absolute power, but also panoptic disciplinary schema.

D. Fiscal culture as a specific configuration of juridical power, government and discipline

16The modern operation of power in contemporary democracies fits within this trilogy. A genealogical account of democracy in Foucaultian terms poses the question of the relationship between these three dimensions through a study of its specific and applied aspects. Our comparative analysis of French and English tax enforcement apparatuses seeks to demonstrate that the cultural differences reflect diverging interrelationships between these three aspects of modern power. French and British contemporary democratic machineries share the same three fundamental cogwheels. However, the expression and articulation of these three types of power-discourse, the relative dynamics and weight of one in relation to the others vary and constitute ultural differences, understood as a dynamic reality.

II. Obtaining corporate fiscal compliance in France and in England: consent vs command

  • 11  Taxation of the largest companies. In the UK, large business taxation applies to the 770 largest c (...)

17Our argument is that British and French tax systems, as elements of democracy in action, should be placed within the wider historical and political, or genealogical in Foucaultian terms, account of the emergence of modern governmentalities related to tax regulation. Such perspective underlines their complex and dynamic nature. French and British governmentalities have developed contrasted frameworks and approaches to deal with the negotiations that are an essential part of obtaining compliance in a field as complex as Large Business Taxation.11

  • 12  Toumi, M. (forthcoming). “Cultures of Compliance - British and French Tax Enforcement Compared”, L (...)

18The historical and empirical research12 from which this paper draws, reveals that early political, economic and constitutional circumstances drove the English monarchy to interpret their sovereign right to levy taxes in terms of consent and negotiation and to accept the mediation of this right very early on. These circumstances allowed the development of a cooperative and trust-based model of tax enforcement where dialogue and legal formalism are used to promote a shared understanding of where and how rules apply. By contrast, French circumstances translated the sovereign prerogative of raising revenue in terms of domination and subjection. Tax enforcement thus evolved into a command and control diagram where the emphasis is on discipline and deterrence.

A. Genealogy of cultures of enforcement

English parliamentarianism and consent

  • 13  Daunton, M. (2001). Trusting Leviathan - The Politics of Taxation in Britain 1799-1914, Cambridge (...)
  • 14  Levi, M. (1988). Of Rule and Revenue. Berkeley, University of California Press.
  • 15  “It is voluntary because taxpayers choose to pay. It is quasi-voluntary because the non-compliant (...)

19Taxation is intimately connected with the nature of the political systems of European States. Martin Daunton13 demonstrated that the way revenue was secured, with more or less success, depended on and helped to mould the relationships between state and citizens in Britain. This view has also been affirmed by Margaret Levi’s comparative analysis of French and English tax systems.14 She presented a contractarian theory suggesting that differences in tax policy over time and between countries are caused by significant variations in the bargaining power of constituents vis-à-vis the ruler. The work of these two authors will be drawn upon here and this section will present in a vastly simplified manner some historical developments to support the connection between English parliamentarianism and consent to taxation, and to explain the contrast in cultures of enforcement between England and France. Levi suggests that the development of a strong central representative institution, Parliament, in England in the late medieval period, and the absence of such an institution in France facilitated the establishment of institutions of what she terms “quasi-voluntary compliance”15 in England relative to France. The initial establishment of a parliament may have represented a concession to powerful elites who require involvement in government, but it also provided a forum for negotiation of taxes between the different interests and the Crown. Even if imperfectly representative, it allowed avenues of appeal, mediation and conditional cooperation between ruler and citizens, and offered an alternative to the dichotomy betweenpaying andoutright resistance, in which France was caught.

  • 16  The English parliamentary system developed in the late medieval period and by the 16th century, Fr (...)
  • 17  Levi, M. (1988), p.108.

20The early parliamentary system in England allowed the emergence of a rudiment of fiscal contract.16 Procedures for requesting and collecting taxes could be established, and pressures about their respect could be mutually exerted. Parliamentary approval, once given, ensured a reasonable degree of quasi-voluntary compliance and therefore reduced the transaction cost of raising revenue. In France by contrast, absolute monarchy blocked the development of a strong and centralised representative institution. As a result monarchs had virtually unrestrained freedom to decide what taxes to levy upon whom, but their ability to actually achieve compliance or extract revenue was hampered by dissent and the high costs of enforcement. It is important to note, without entering into much detail, that factors other than political ones contributed to the extent to which the society’s fabric constrained monarchs and led to distinct bargaining requisites and fiscal policies. Levi explains that the two countries’ disparity of size played a role for instance (England’s smaller size made central representation possible while France was burdened by its geography at a time when travel was slow, dangerous and expensive). Economic base and representative institutions also created variations in sources of revenue, forms of agency, and costs of negotiation. The English reliance on revenue from taxes and licensing of a single major trade, the wool trade then the cloth trade, were critical to the development of Parliament and to the nature of tax administration. On the one hand, English monarchs indeed had little choice but to make concessions to the wool magnates. On the other hand, it was easier to monitor revenues from one major source, which reduced transaction costs and administrative apparatus. Meanwhile, France relied on revenue from a multitude of very diverse sources that protected the Crown from weighty influences but was extremely costly to administer. By the 16th century French and English national tax systems were already showing some of their contrasting features, as Levi noted: “French and English national tax systems took the forms that were to distinguish them for centuries into the future (…) English monarchs received grants of taxation through a central Parliament, while French monarchs negotiated with a vast number of localities and individuals.”17

  • 18  Daunton, M. (2001), p. 37.
  • 19  Levi, M. (1988).

21France’s lack of a centralised forum for negotiating taxes and adoption of the logic of “command and control” resulted in a series of implications the echo of which still resonates today: greater transaction costs to raise taxes; less legitimacy and acceptance of taxation; the reliance upon a large administrative network of agents and tax farmers to enforce compliance and collect taxes through an inquisitorial and coercive system with the disastrous consequences it eventually brought about. Britain by contrast chose the way of consent and emphasised quasi-voluntary compliance. It succeeded in developing a relatively efficient administration based on local officials. Assessment and collection of taxes as a general rule was entrusted to justices of the peace drawn from the local gentry and clergy. Similarly, collection of the land tax, assessed tax and later the income tax was delegated to commissioners drawn from the ranks of the local taxpayers, which contributed to a high level of consent.18 The English system was victim to some deterioration but it never earned similar reputation for corruption as the French administration possessed nor did it arouse the same bitter resentment from its people. A major factor was that it stayed relatively small and could be kept under check. Under Elizabeth the First, there was approximately 1 royal officer for every 4,000 inhabitants while the ratio in France was 1:400.19

  • 20  Stephens, L. (1900). “The English Utilitarians.” 2004, from (...)

22Contrary to what happened in France, the English aristocracy had not dissociated privilege and duty and their self-government induced a typical blending of the private and public spheres. In return for power and representation, country-gentlemen retained their obligation to perform administrative functions that may have been arduous and complicated but meant that the connection between state and citizen remained organic and was mediated locally. The system of “self-government” therefore entailed little need and legitimacy for a central administration, in contrast to France where it was introduced before the Revolution at least partly to compensate for the aristocracy’s unwillingness to carry out its governing duties, and partly due to the low levels of voluntary compliance with royal rule. The English country-gentlemen would rely on the Lords in Parliament to obtain sanction of their activities and maintain direct authority over the affairs of their estates.20 They avoided as much as possible delegating influence to any sort of administrative body representing the state, which they instinctively mistrusted as carrying risks of wastefulness and arbitrariness. A close connection between State and society was therefore maintained in England and the system of self-rule and the logic of consent created a high degree of mutual interdependence and mutual trust.

 “Command and control” from Ancien Régime to the French Republic

23In France, the idea of puissance publique (state power) is directly inherited from the 1789 Revolution but its roots go back to the political and social structures of the Ancien Régime. The first half of the 17th century is usually taken to mark the birth of the French State.From 1614 to 1789, the French monarchy ruled without recourse to the Estates General confirming the divine right theory that the king was accountable to God alone. Royal absolutism needed instruments however, and the process of “centralisation” began then with the creation of a network of royal agents. Their competence was general and they exercised powers of police, justice and finance. More specifically, they oversaw the collection of taxes and the accounting and financial management of their dominion. Therefore, the tasks, which in England were essentially carried out by the country-gentlemen over their estates, were the duty of a body of central agents representing the monarchical state in France. Abuse of the system of offices was rife however and contributed to the emergence of a parasitic class, whose illegitimate privileges were going to be a direct cause of the Revolution.

  • 21  Ardant, G. (1971). Histoire de l’Impôt - De l’Antiquité au XVIIe Siècle. Paris, Fayard.
  • 22  The taille was a direct land tax on the peasantry and non-nobles in Ancien Régime France.
  • 23  Ardant, G. (1971), p. 418.

24Within this context, relations of tax enforcement were quite literally murderous. Taxation was bitterly resented and on numerous occasions rebellions turned violent and deadly. Gabriel Ardant21 recounts a movement of particularly intense tax revolts in France that lasted through the 17th century to 1720-1730. They cannot all be explained by taxation but reveal real and deep discontent. One example illustrating the intensity of anti-tax feelings is the “Revolt of Angoulême” under the ministry of Richelieu. It followed a steep increase by the Cardinal of the taille22 in the countryside, from 26.5 million French pounds in 1634 to 39.6 million in 1636. On 15 May 1636, peasants took their anger out on the tax collectors. Twelve of them had their throat slit and one was skinned alive23, which does put sharply into context the concept of resistance to taxation!

  • 24  Robbez-Masson, C. (1990), La Notion d’Evasion Fiscale en Droit Interne Français. Paris, LGDJ, p. 4 (...)
  • 25  Ardant, G. (1971).

25 “Fiscal insurrections” regularly punctuated French history between the 16th and 18th century.24 The constant possibility of this kind of taxpayers’ revolt must have had an obsessive character for the politicians and administrators of the time and had a direct impact on the structure of the fiscal administration.25 French monarchs resorted to tax farming as a way to ensure funds while buying compliance. The Intendants were not merely in charge of collecting and assessing taxes. The “command and control” approach to taxation was taken further when in 16th century, the monarchy delegated a great part of the function of maintaining public order to them, resulting in the concentration in their hands of tax assessment, tax collection, tax enforcement, and law and order generally.

26Ardant confirms that there is a direct connection between the need to raise and administer revenue and the French system of centralised administration. The growth of the central state to the detriment of local government was a consequence of the coercive and inquisitorial character of the tax system. Indeed, the system of local assemblies that existed in the 17th century (the “provincial estates”) was suppressed by the Crown when they were perceived to hinder the ability to levy taxes. As a result, the regions were placed under central administrative tutelage (by the intendants) in 1680.

  • 26  Daunton, M. (2001), p.7.

27Although taxation was a higher proportion of the national income in Britain than in France in the 18th century, and was two to three times higher in per capita terms, resistance to taxes was higher in France than in Britain.26 A quote from Martin Daunton illustrates the contrast between French and British approaches to tax enforcement in that period:

  • 27  Daunton, M. (2001), p.7.

 “Unlike in France, there were no glaring exemptions to taxation in Britain, and taxpayers were incorporated into the fiscal regime through local machinery for assessment and collection, and participation in the negotiating of duties in parliament (…) In France, the fiscal system created greater tensions, with fewer opportunities for bargaining and resolution of conflicts. Sale of offices, use of tax farmers with a private interest in the collection of revenue, exemptions to aristocrats and church, presence of intrusive internal duties, and absence of an assembly to negotiate disputes between interests and with the crown, all generated tensions. (…) In Britain, constant negotiation of taxation through parliament meant a higher level of consent to taxation.”27

  • 28  “Article 13 – For the maintenance of public power, and the expenses of administration a common con (...)

28The unresolved tensions in the French system led to the 1789 Revolution, which razed the Ancien Régime to the ground and laid the foundations of re-invigorated – rather than new - institutions on a novel and strong sense of republican citizenship under a national flag. The republican State was going to liberate citizens from the traditional authorities that had ruled their life so far (king, church, nobles) and transcend the dynamics of domination and coercion. The maxim of Liberté, Egalité, Fraternité epitomised the collective aspirations of a more participative relationship between state and citizen and a fairer social contract. It involved reconciliation with taxation, but taxation based on the principles of participation and equality. The 1789 Declaration of Human and Citizens’ Rights dedicates two of its only seventeen articles to taxation, establishing it as a republican ideal and legitimising the connection between taxation and state power.28 A few years later, the 1793 Constitution also enshrined taxation as a republican responsibility and honour that should be shared by all, holding that “No citizen is exempted from the honourable obligation of contributing to public expenses.”

29However, the dynamic of resistance to taxation and command system had left deep marks in the minds, behaviours and institutions of the nation. The road to a balance of powers in France has not been straightforward and took many detours back to despotism. In England, it was the industrial revolution and its corresponding liberal and utilitarian ideals that were to transform and re-define existing social and political structures to their current form. In both countries, the tax enforcement practices carry that legacy.

B. Contemporary democracies in action: contrasting fiscal enforcement practices

  • 29  This empirical study was carried out in 2002/3 by one of the authors for the purposes of her docto (...)

30This section is based on fieldwork interviews carried out in Paris and London with corporate taxpayers, tax advisers and tax officials.29 The findings presented here are extremely summarised and also involve a huge chronological leap between origins and present time. However they provide an interesting glimpse of the manner in which the French and English diverging diagrams of representation and exercise of power translated into contrasting practices of tax enforcement.

The English cooperative model and formal legalism

31Grounded in consensus and participation, taxation has been detached from the personal power of the Sovereign early on, allowing fiscal relations to evolve fairly easily from purely juridical and disciplinary networks of power into more governmentalised ones. Britain’s parliamentary and liberal tradition as well as its distaste for state intervention played a part in taxation being interpreted as a concession to government, negotiated from the base to the top through Parliament rather than a duty of subjects to their sovereign. Within the English conception and practice of tax enforcement, collaboration and quasi-voluntary compliance hence took the lead on coercion. The UK fiscal governmentality, based on consent and cooperation, achieves a higher level of legitimacy than a coercive approach and seeks to shift the burden of compliance from the tax authorities to all those involved (taxpayers and their advisers). The resulting UK tax enforcement style is relatively un-hierarchical and unlike in France, the tax administration is not seen as a formidable instrument of central power whose mission is to intimidate taxpayers into compliance, but tends to be viewed as accessible and open to questioning. Respondents have commented that dialogue between taxpayers, advisers and tax authorities to determine the scope of tax provisions happens relatively frequently and easily, either through tax rulings or informal exchanges. This practice has particular democratic value in the context of corporate taxation where the complexity of the rules adds to their indeterminacy, making their actual scope difficult to interpret and define without regulatory conversations with tax authorities.

  • 30  Throughout the 20th century, English judges have gained more freedom and discretion in the interpr (...)

32This system is not without problem however nor is it static. It has come under severe pressure since incentives and opportunities to avoid corporate taxes have intensified with the internationalisation of businesses. The marginal juridical dimension of the UK tax system was strongly reactivated and manipulated as a response to avoidance. Tax authorities and courts turned to legal formalism as detailed tax rules were multiplied in the hope of controlling abuses (more bars were added to the juridical cage). However, the UK’s particular blend of governmentality clashed with the formalistic manner in which the system became operated (such as the judiciary’s obsessively literal approach to the interpretation of tax rules).30 It only served to increase the vulnerability of the system to avoidance and complexity. Formal legalism indeed narrows the extent of regulatory interpretation by restricting it to the letter of the rules. As a result, the system becomes “self-executing” and taxpayers and their advisers can assess with fairly high certainty the tax treatment of their transactions from reading case-law and statutes, thus by-passing regulatory conversations with the tax administration. They also exploit the excessive regulatory details with strategies of “creative compliance” whereby transactions are crafted to abide by the letter of the rules but circumvent its purpose. A system high on trust and low on coercion like that of the UK, with scarce or implausible coercive recourses, fails to discourage the use of such aggressive interpretations or manipulation of rules for tax avoidance. It affects the balance of power against the tax authorities and neutralises the democratic advantage of the collaborative approach.

The French command model and substantive legalism

33By contrast, the French governmental diagram is dominated by the disciplinary translation of the sovereign prerogative of taxation and remains markedly focused on the dynamics of domination and coercion. The fiscal administrative machinery is still intertwined with an archaic and monolithic conception of the relationship between state and taxpayer as one of subjection. This combination of disciplinary and juridical conceptions of the duty to pay tax is inscribed in the contemporary fiscal machinery. The resulting fiscal governmentality is characterised by a strongly dissymmetrical relationship between the state and taxpayers, be they simple citizens or powerful corporations, and institutionalised mistrust. Panoptic surveillance reflects this mistrust through the juridical vision of a one-way unmediated and transparent relationship between Fisc and taxpayer.

  • 31  Originally a civil law concept preventing the use of a right beyond its “reasonable” scope, it has (...)

34The constitutional legitimacy that the republican system confers on the French administrative power certainly contributes to the strength and confidence in its own authority that characterise its revenue services. Fieldwork has demonstrated that the “command and control” approach to tax compliance still very much sets the tone for how relations of enforcement are played out, and the contrast is particularly striking by comparison with the British culture of enforcement for large businesses. The French model thus emphasises instruments of surveillance and deterrence such as inquisitorial audits and the doctrine of abus de droit31 to keep taxpayers within the legal bounds. Those who are caught venturing out of them risk heavy financial penalties.

  • 32  The concept of a substantive approach to law contrasts with the formal or literal approaches. The (...)
  • 33  Selznick, P. (1992). The Moral Commonwealth. Oxford, University of California Press, p. 473.

35The choice of the gaze over the cage and relative freedom from the requisites of a formal understanding of law meant that the French system has come to rely on a fairly substantive32approach to tax law, both in statutory drafting and judicial interpretation. This is translated by the prevalence of principles over specific rules in the tax code for instance. Such an approach should in theory provide the regulatory space for interpretive conversations to take place, so that the meaning and scope of tax provisions written in terms of purpose rather than detail can be clarified and negotiated between taxpayers and revenue services. Indeed, where norms are conceived in open-ended terms, more space is created for regulatory conversations to determine how they should actually apply in concrete cases. In Selznick’s words “Instead of taking each rule as unproblematic, to be changed only by legislation, courts and other agencies look to the reasons behind the rule, that is to the purposes, policies and values it is supposed to achieve.”33

36This is where the French approach is flawed however, since its control culture of tax enforcement limits dialogue between fiscal authorities and taxpayers. The hierarchical and coercive French tax enforcement style has traditionally resulted in confrontational rather than cooperative relations between taxpayers and revenue authorities and offers restricted opportunities to interact and debate the meaning of tax provisions. Regulatory debate is essentially organised around the frequent but inquisitorial and coercive audits and the rare and discretionary agréments. This autocratic approach to tax compliance is not conducive to a “normal” dialogue between taxpayers and tax authorities that could clarify the scope of principled and purposive provisions.

37The particular French combination of principles, limited dialogue and coercion provides the tax administration with the upper hand in tax enforcement. As a result, system abuse, tax avoidance and complexity have been kept in relative check but at a high democratic cost.

III. Conclusions

38The above study reveals two diverging models of tax enforcement, which reflect contrasting diagrams of the exercise and representation of power in contemporary democracy.

A. Cooperation and self-government in UK fiscal governmentality

  • 34  Dean, M. (1999), p. 102.
  • 35  Dean, M. (1999), p. 105.

39Through the development of Parliamentarism, the levying of taxes in England became an institutional relationship readier to governmentalisation. Governmentalisation has been described as “the process whereby the art of government is separated from the theory and practice of sovereignty and whereby that theory and practice must reconcile itself with this burgeoning and proliferating art of government.34 Fiscal rules are thoroughly connected to a certain art and activity of government which problematizes the relationship of the state to a population and to society, rather than being the expression of a transcendent authority over subjects. “[G]overnment must take into account the nature of the things to be governed and their disposition.35

  • 36  The expression “enfolding of authority” is borrowed from M. Dean who describes in this way Foucaul (...)

40British tax culture is thus based on a higher level of governmentalisation of fiscal relations that have been detached from the exercise of juridical power earlier, and to a greater extent, than in France. Hence, tax regulation is less concerned with the representation and exercise of the absolute authority of the Tax Revenue than it is with techniques of enfolding state authority and self-government.36 The fiscal relationship very quickly ceased to be an unmediated juridical relation between the Sovereign and his subjects because of the intervention of Parliament and local aristocrats as intermediaries in a decentralised process of levying. In England, the power of tax levying was, almost from its origins, detached from the person and juridical power of the Sovereign. Instead of being at the heart of the power relations between the Monarch and his subjects, the fiscal relationship in England was inscribed in a certain Modus Vivendi, a balance of powers between the sovereign and a self-ruling aristocracy. It is therefore unsurprising that in the modern era and faced with powerful corporations, the Inland Revenue is able to reactivate trust, self-government and consensual relations as the basis of fiscal compliance. The juridical dimension of fiscality remains marginal but is present in the rule-based approach and formalism of contemporary tax regulation.

41In the context of fiscal compliance, as in others as the current financial and economic crisis demonstrates, these techniques have their limits. Indeed, manipulations of accounts, in tax-planning strategies and self-application of tax rules show that the experts on which the system so relies choose their allegiance and are easily able to escape a weakly centralised panoptic gaze.

B. The weight of juridical and panoptic logics in French fiscal governmentality

42Historically, the levying of tax in France was the occasion for the King to exercise and represent his might. Taxation was connected to the personal power of the King. It was an unmediated relationship between the King and his subject. As such, it is caught in a juridical diagram of power relations. Taxation gives rise to juridical relations the principal object of which is the expression of domination of the sovereign over his subjects: command. The fiscal relation is therefore a juridical one that presupposes a form of sovereign domination and excludes bargaining. The development of disciplinary ethos through the administrative apparatus enabled the implementation of effective disciplinary surveillance: control.

43This relation between the exercise of fiscal sovereignty and its disciplinary implementation has been governmentalised, that is, inscribed in the modern administrative and technological apparatus destine to shape the conduct of free individuals. The governmental fiscal relationship between the democratic state and the taxpayer, whatever his/her actual economic power, is hierarchical, centralised and unmediated. However, it is no longer a strictly personal relationship as it is exercised through a faceless administration that deploys an array of disciplinary techniques.

  • 37  Raffenne, C. (2002). “Trust, The Keepers of the Temple and The Merchants of Law: The Riddle of the (...)

44Modern fiscal governmentality in France reflects a specific relationship between the remains of monarchical power, a liberal problematic of government and the disciplinary techniques of government. It has been argued elsewhere that modern French law through its embodiment in Codes reflects the composite nature of Napoleonic Governmentality, mixing liberalism and authoritarianism.37

  • 38  Raffenne, C. (2002), p. 158.

45Panopticism, as implemented in the French context, has institutionalised mistrust. It is a system that presumes, relies on, and generates mistrust between individuals. “In the Panopticon each person, depending on his place, is watched by all or certain of the others. You have an apparatus of total and circulating mistrust, because there is no absolute point.38 The only agent escaping this gaze is the state and its administrations. In particular, as we have seen, the principle-based approach of French fiscal rules introduces opacity and uncertainty in the administration of these rules.

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Ardant, G. Histoire de l’Impôt - De l’Antiquité au XVIIe Siècle. Paris, 1971, Fayard.

Beik, W. “Etats et Société en France au XVIIè Siècle : La Taille en Languedoc et la Question de la Redistribution Sociale.” Annales : Economie, Sociétés, Civilisations, 39(6): 1270-98, 1984.

Braithwaite, J. Markets in Vice, Markets in Virtue. Oxford, 2005, Oxford University Press.

Daunton, M. Trusting Leviathan - The Politics of Taxation in Britain 1799-1914, 2001, Cambridge University Press.

Dean, M. Governmentality - Power and Rule in Modern Society. London, 1999, Sage Publications.

Foucault, M. Discipline and Punish. London, 1977, Penguin Books.

Levi, M. Of Rule and Revenue. Berkeley, 1988, University of California Press.

Moran, M. The British Regulatory State. Oxford, 2003, Oxford University Press.

Picciotto, S. “Constitutionalizing Multilevel Governance?” International Journal of Constitutional Law 6, 2008.

Raffenne, C. “Trust, The Keepers of the Temple and The Merchants of Law: The Riddle of the Fiducie”. Law, University of Warwick. PhD, 2002.

Robbez-Masson, C. La Notion d’Evasion Fiscale en Droit Interne Français. Paris, 1990, LGDJ.

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Toumi, M. (forthcoming). “Cultures of Compliance - British and French Tax Enforcement Compared”. Law, Lancaster University.

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1  Foucault connects the development of fields of knowledge with that of power relations (hence the play on words with the notion of “discipline” which refers both to a form of power and to a field of knowledge). Power operates at both societal and discursive levels and constitutes its own objects and fields of knowledge. A Foucaultian approach studies both the practice of power but also how it constitutes fields of expertise such as legal regulation, administration or management.

2  Dean, M. (1999). Governmentality - Power and Rule in Modern Society, Sage, p. 20

3  Dean, M. (1999), pp. 20-21.

4  Dean, M. (1999).

5  Foucault, M. (1977). Discipline and Punish, London, Penguin Books.

6  Foucault, M. (1977), p. 201.

7  Foucault, M. (1977), p. 206.

8  Foucault, M. (1977), p. 209.

9  The contrast of the gaze and the cage is borrowed from Picciotto, S., “Constitutionalizing Multilevel Governance?”, International Journal of Constitutional Law 6, 2008.

10  “Governmentality”, lecture given in 1978 and published in The Foucault Effect: Studies in Governmentality, Burchell, Gordon, Miller (eds), Harvester Weatsheaf, England, 1991, p. 102.

11  Taxation of the largest companies. In the UK, large business taxation applies to the 770 largest corporations.

12  Toumi, M. (forthcoming). “Cultures of Compliance - British and French Tax Enforcement Compared”, Law, Lancaster University.

13  Daunton, M. (2001). Trusting Leviathan - The Politics of Taxation in Britain 1799-1914, Cambridge University Press.

14  Levi, M. (1988). Of Rule and Revenue. Berkeley, University of California Press.

15  “It is voluntary because taxpayers choose to pay. It is quasi-voluntary because the non-compliant are subject to coercion – if they are caught” [original emphasis], in Levi, M. (1988), p. 52.

16  The English parliamentary system developed in the late medieval period and by the 16th century, French and English national tax systems were already showing some of their contrasting features.

17  Levi, M. (1988), p.108.

18  Daunton, M. (2001), p. 37.

19  Levi, M. (1988).

20  Stephens, L. (1900). “The English Utilitarians.” 2004, from

21  Ardant, G. (1971). Histoire de l’Impôt - De l’Antiquité au XVIIe Siècle. Paris, Fayard.

22  The taille was a direct land tax on the peasantry and non-nobles in Ancien Régime France.

23  Ardant, G. (1971), p. 418.

24  Robbez-Masson, C. (1990), La Notion d’Evasion Fiscale en Droit Interne Français. Paris, LGDJ, p. 45.

25  Ardant, G. (1971).

26  Daunton, M. (2001), p.7.

27  Daunton, M. (2001), p.7.

28  “Article 13 – For the maintenance of public power, and the expenses of administration a common contribution is indispensable; it shall be equally apportioned between citizens according to their ability.Article 14 – Citizens have the right to observe, by themselves or their representatives, the necessity of the public contribution, to consent to it freely, to trace how it is used and to determine its quota, its base, its collection and duration.”

29  This empirical study was carried out in 2002/3 by one of the authors for the purposes of her doctoral thesis:Toumi, M. (forthcoming), “Cultures of Compliance - British and French Tax Enforcement Compared”, Law, Lancaster University.

30  Throughout the 20th century, English judges have gained more freedom and discretion in the interpretation of statutory rules, with the ability to take into account the policy objective behind a statute (“the mischief rule”).However, as regards the interpretation of tax rules, the judges have applied the “literal rule” of interpretation, limiting the scope of the law to what is formally provided for in the legal text.

31  Originally a civil law concept preventing the use of a right beyond its “reasonable” scope, it has been extended to French tax law to challenge fictitious or abusive transactions. It is codified under article L64 – B Livre des Procédures Fiscales.

32  The concept of a substantive approach to law contrasts with the formal or literal approaches. The latter are concerned with the form of law (the manner in which it was promulgated) or the actual words of the provisionsas setting the boundaries between what is lega land what is not. The substantive approach on the other hand, focuses on the substance of legal transactions rather than their form to determine their legality.

33  Selznick, P. (1992). The Moral Commonwealth. Oxford, University of California Press, p. 473.

34  Dean, M. (1999), p. 102.

35  Dean, M. (1999), p. 105.

36  The expression “enfolding of authority” is borrowed from M. Dean who describes in this way Foucault’s notion of government: “Foucault’s genealogies...allow us to analyze governmental and ethical practices as just such practices of enfolding authority...[one] aspect of these practices of enfolding concerns...the governing work. This refers to all the means, techniques, rationalities, forms of knowledge and expertise that are to be used to accomplish the enfolding of authority.

37  Raffenne, C. (2002). “Trust, The Keepers of the Temple and The Merchants of Law: The Riddle of the Fiducie”. Law, University of Warwick. PhD.

38  Raffenne, C. (2002), p. 158.

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Coralie RAFFENNE et Marika TOUMI, « Democracies in Action: A Foucaultian Perspective on British and French Tax Enforcement »e-Rea [En ligne], 7.1 | 2009, mis en ligne le 15 juillet 2009, consulté le 23 juillet 2024. URL : ; DOI :

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Ph.D University of Warwick, Maître de Conférences à l’Université d’Orléans

Marika TOUMI

Doctorante, University of Lancaster

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