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Political parties and campaigns require significant resources to be effective. India has developed complex election expenditure, political party funding, and reporting and disclosure laws. These laws have perverse impacts on the electoral system: they drive campaign expenditure underground and foster a reliance on unaccounted funds or ‘‘black money.’’ This leads to adverse selection, where those able to work with black money dominate politics, and triggers pervasive corruption. Innovative financing methods such as Electoral Bonds also have serious flaws. Possible remedies include partial state financing of parties and candidates.

Organized through the South Asia-Markaz Fellowship program.

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Professor Rajeev Gowda is a former Member of Parliament, Rajya Sabha. He heads the Congress party’s Research Department. He has previously been Chair of the Centre for Public Policy at the Indian Institute of Management Bangalore. He obtained a PhD in Public Policy and Management from the Wharton School, University of Pennsylvania.