Why politics became a business in poor regions?

In Bihar’s feverish run-up to the Assembly elections, few stories capture the state’s political rot better than that of Madan Sah. The aspiring politician from Madhuban constituency gained viral notoriety after being denied a party ticket. In a moment of despair, he tore his clothes and rolled on the road, crying that he had sold everything to pay for his shot at politics.

“I was asked to cough up Rs 2.70 crore,” he said. “I managed by putting my children’s weddings on hold. Now I am finished. At least, they should return the money.”
It’s tempting to dismiss Sah’s outburst as yet another anecdote in India’s never-ending theatre of political drama. But his story cuts deeper. It lays bare the brutal economics of politics in poor regions — where low per capita income turns public office into the most lucrative enterprise in town. Politics here is not about service. It is about returns.

The political resource curse

This phenomenon reflects what economists might call this political resource curse. In resource-rich countries, like, Nigeria, oil and minerals breed corruption because they offer easy rents to those in power. In Bihar, the scarce resource isn’t oil or minerals— it’s political power itself. It’s hoarded, traded, and monetised through patronage networks.

Where jobs are scarce and private enterprise struggles, politics becomes the ultimate investment. Winning a ticket is the entry fee into a market of influence. Candidates calculate their campaigns as risky but potentially high-yield ventures, expecting to recover their “investment” once in office. The result is a perverse equilibrium — democracy distorted by money and favouritism.

Money makes the ballot go round

Cash-driven campaigns: Election observers note that even India’s Election Commission caps (Rs 95 lakh and Rs 40 lakh per candidate for Parliamentary Constituency and Assembly Constituency, respectively) is routinely shattered. Many aspirants spend 7–12 times this limit, with some pouring Rs 20–50 crore into a single constituency. Remarkably, about 25% of all campaign funds end up directly in voters’ hands, often as cash, liquor or gifts. It’s a vicious exchange: voters expect payoffs, and candidates raise illicit funds to meet those expectations.

Ticket-selling culture: Party nominations themselves are treated as tradeable assets. Aspiring politicians may be asked to buy tickets – Sah’s Rs 2.7 crore claim is just one glimpse into this underground marketplace. Aspiring leaders mortgage land, postpone weddings, and drain savings to “buy” legitimacy. Those who can’t pay are sidelined — not for lack of vision, but for lack of cash.

Patronage and cronyism: Once elected, officials recover their investments by distributing public contracts, jobs and licenses to loyalists and donors. The IRCTC land-lease case involving the RJD leadership illustrated this pattern starkly: a Delhi court described it as “possibly an instance of crony capitalism” disguised as reform. In other words, government assets were treated as spoils for those in power.

A vicious political economy

This rent-seeking political economy reveals a tragic irony: in regions that most need effective governance to spur development, the economic incentives of political office often align against good governance. Wealthy incumbents (or their backers) dominate funding, deterring honest but poor candidates. Voters often rationalize accepting freebies simply because economic alternatives are limited. Over time, policy choices tilt toward the demands of big donors and office-seekers, not the public good. The outcome?

A vicious circle: money buys power, and power multiplies rents for those who paid.

Beyond morality: Fixing incentives

Breaking this pattern requires recognizing that the problem is not merely ethical or moral—it’s structural. As political economists argue, corruption thrives when the incentives to be honest are weaker than the rewards for being corrupt. Breaking the cycle means redesigning those incentives.

The lessons from the global “resource curse” may apply here too: build impartiality-enhancing institutions that make favouritism costly and transparency rewarding. India’s Supreme Court’s move to strike down anonymous electoral bonds was one such corrective. But more must follow — mandatory disclosure of donations, real enforcement of spending limits, and penalties for parties caught selling tickets.

Citizens must demand better

Reform will not emerge from within the political class alone. It requires pressure from below — from citizens, journalists, and civil society refusing to treat corruption as destiny. The problem is, we all want Bhagat Singh in the society, but in the neighbourhood! Civic education, investigative reporting, and local accountability movements are not moral luxuries; they are democratic necessities.

Bihar’s predicament reflects why democracy alone is no guarantee of fair development. When public office becomes a business enterprise, ordinary citizens lose. As one study warns, opaque politics “corrodes the basic tenet of accountability” and erodes faith in the system. To escape its political resource curse, Bihar must make serving voters — not selling influence — the most profitable career move a politician can make. That transformation won’t come easy, but it’s the only investment that promises real returns for democracy.

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