Costs of Democracy: Political Finance in India review: Following the money trail

Where do funds come from for elections? What are they used for? A searing look at how the vote bank is financed

August 04, 2018 07:25 pm | Updated 07:25 pm IST

In 1955, the great Indian sociologist M.N. Srinivas published his celebrated essay, ‘The Social System of a Mysore Village’, based on fieldwork that he carried out in 1948 in a village which he called Rampura. This fieldwork, carried out in the year of Gandhi’s death, had influenced Srinivas’s thinking profoundly. It would lead to the beautiful reflection titled ‘The Remembered Village’ two decades later, when a fire started by anti-war arsonists in a U.S. university destroyed his material, and Srinivas had to reconstruct, through memory, the life and dynamics of the village.

But that was to come later. In his 1955 essay, Srinivas used the term ‘vote bank’ for the first time: “The coming of elections gives fresh opportunities for the crystallization of parties around patrons. Each patron may be said to have a ‘vote bank’ which he can place at the disposal of a provincial or national party for a consideration which is not mentioned but implied.”

Role of money

The formulation ‘vote bank’ would become standard journalistic usage in the discussion of India’s electoral politics in the years to come. While the nature of such ‘vote banking’ may have changed in the seven decades of post-Independence Indian politics, the role of the “consideration not mentioned but implied” nevertheless remains central.

It is self-evident that you cannot have democracy without free elections. But it seems equally impossible to imagine elections without the all-pervasive role of money. Where do the funds come from; what are they used for; what are the implications of such transactions; how can they be tracked and regulated; and what are the larger contexts in which the drama of political finance is played out?

Costs of Democracy: Political Finance in India is a thought-provoking and gripping look at the role of money in Indian elections. In their introduction, editors Devesh Kapur and Milan Vaishnav remind us that the use of money in elections is not new. Even Plutarch, two millennia ago, commented on the phenomenon of buying and selling of votes – while writing about the fall of the Roman republic.

But as Kapur and Vaishnav point out, in the 21st century, with liberal democracy under stress across the world, and with the weakening of cadre-based parties, growing inequality, and increasing political polarisation, the question of money in politics seems more acute than ever before. While studies have focused on the role of political finance in advanced industrialised democracies, the role of money in politics in the developing world could be quite different and needs further research.

Particularly so in the world’s most populous democracy. As the editors point out, since 1991, the sizes of both economy and electorate have grown substantially; moreover,the political landscape has changed. The 73rd and 74th Constitutional Amendments led to nearly three million locally elected positions, and increased fiscal devolution raised the stakes, which has meant that political finance now plays a role not only in national and state elections but also urban local bodies and panchayats.

Regulation issues

In its seven chapters, Costs of Democracy follows the money in insightful new ways. Eswaran Sridharan and Milan Vaishnav point out that while the Election Commission of India has earned deserved acclaim in ensuring the conduct of fair and equitable elections, there are challenges in the regulation of political finance.

Where do campaign funds come from? In a fascinating empirical analysis of the role of personal wealth of over 20,000 candidates over three national elections from 2004 to 2014, Neelanjan Sircar finds that a candidate’s personal wealth is strongly correlated with electoral success; competitive political parties systematically select candidates who are about 20 times wealthier than others; and even among wealthy candidates from different parties, the wealthiest has the greater chance of winning.

Personal wealth is not the only source of political finance. In a sharp ‘forensic’ study of the connections between the construction sector and Indian elections, using data on cement consumption in both real estate and infrastructure, in elections in 17 States over 15 years, Kapur and Vaishnav find a contraction in cement consumption during the month of State assembly elections that cannot be explained away with the usual reasons. Such “under-the-table contributions”, they suggest, could be the reason for the persistence of red tape and regulation in the Indian economy.

A high price

How does the money flow? Following the trail in Mumbai and Bihar elections through ethnographic accounts, Lisa Björkman and Jeffrey Witsoe find that instead of the conventional presumption of a simple downward flow from party to voter in exchange for votes flowing upward from voter to party, “Money that changes hands during the election flows laterally and multidirectionally from a wide variety of sources... The relationship of democratic representation cannot be understood as a social contract, but rather as a dense web of socio-material relations in which money plays just one part.”

Finally, Simon Chauchard asks what it is that costs so much in Indian elections. Studying campaign expenses in Mumbai (in a constituency that he calls Savli to protect the anonymity of his interlocutors — there is no constituency called Savli in Maharashtra), he says that attempts to buy votes are not even the most important elements of election expenses.

Election campaigns are becoming more expensive and sophisticated because they are far more competitive. In which case, the concerns go beyond handouts and quid pro quos, to far-reaching questions about the sustenance of democracy itself.

Costs of Democracy: Political Finance in India ; edited by Devesh Kapur and Milan Vaishnav, Oxford University Press, ₹750.

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