The inflation of politics

In advanced democracies, campaign spending has ballooned as media environments fragment and attention becomes scarce. The United States presidential election of 2020 cost $14.4 billion, double the 2016 total. India's 2019 general election cost an estimated $8.6 billion, making it the world's most expensive election by absolute spending. Even in smaller democracies, the trend holds. Brazil's 2022 election cost $2.8 billion. France's 2022 presidential race exceeded €500 million.

In developing economies, the costs rise even faster, because elections are not only contests for office but battles for access to state resources. Where politics is personalised rather than programmatic, power does not rest on ideology or performance but on networks: party machines, business patrons, regional brokers, and security actors. These networks expect returns. Once in office, leaders discover that governing is not merely about passing laws but about continuously servicing the alliances that made victory possible.

The bill is rarely itemised. It appears instead as inflated public contracts, selective tax exemptions, discretionary subsidies, regulatory forbearance, and an expanding perimeter of "strategic" public enterprises whose finances sit just beyond parliamentary scrutiny. Power, once acquired, becomes a fixed cost. The state begins to govern less and service coalitions more.

Coalition arithmetic and fiscal leakage

The problem is most acute in fragmented political systems. Where no single party commands durable dominance, governments are assembled through coalitions whose internal coherence is thin. Policy becomes secondary to arithmetic. Ministries are distributed not for competence but for balance. Budgets become bargaining tools. India's coalition governments between 1996 and 2014 saw ministerial appointments increase by 42 per cent compared to single-party majorities, whilst cabinet stability decreased by 35 per cent.

In such environments, public finance ceases to be a planning instrument and becomes a settlement mechanism. Spending is directed not where it is most productive, but where it is most politically stabilising. Italy, which has had 68 governments since 1946, averaged 47 per cent higher public procurement costs than Germany (19 governments in same period), according to European Commission data. Projects are launched, paused, rebranded, and relaunched not because conditions change, but because coalitions do.

The economic cost is not always immediately visible. Roads are announced but unfinished. Energy projects stall halfway. Industrial parks exist on paper. Over time, however, the accumulation of half-executed commitments erodes fiscal space and credibility alike. Growth slows not because the state spends too little, but because it spends incoherently. India's infrastructure completion rate dropped from 87 per cent (1980-1995) to 54 per cent (1996-2014) during its coalition era, according to Planning Commission data.

The illusion of free money

One reason this system persists is that its costs are obscured. Governments increasingly rely on revenues that do not require direct consent: borrowing, asset sales, windfalls, or externally generated income streams. When the state is not dependent on broad-based taxation for survival, the link between citizens and accountability weakens. Borrowing, in particular, offers an illusion of painless politics. It allows today's coalitions to be financed by tomorrow's taxpayers.

Debt becomes a political lubricant, smoothing over internal tensions without forcing difficult trade-offs. Yet debt is never neutral. As it accumulates, it reshapes policy choices. Interest payments crowd out social spending. Infrastructure budgets shrink even as rhetoric expands. Amongst OECD countries, debt servicing costs rose from 6.8 per cent of government expenditure in 2000 to 11.4 per cent in 2023. In emerging markets, the increase was sharper: from 9.2 per cent to 17.8 per cent.

Monetary authorities face pressure to accommodate fiscal excess, blurring institutional boundaries. Eventually, the state begins to govern less and service more. Japan's debt service reached 23.7 per cent of government expenditure in 2023, compared to 13.2 per cent in 2000. Italy's figure exceeded 18 per cent. Even the United States, with lower borrowing costs, saw debt servicing rise from 8.9 per cent to 13.4 per cent over the same period.

Bureaucracy as collateral

As political costs rise, bureaucracies are drawn into the process. Appointments become instruments of coalition management rather than administrative necessity. Regulatory agencies are asked to look away, slow down, or speed up, depending on political need. Over time, this corrodes state capacity. Talented officials leave or disengage. Decision-making becomes risk-averse, not because rules are strict, but because they are selectively enforced.

This is not dramatic collapse. It is administrative fatigue. The World Bank's Government Effectiveness Index shows declining scores across 43 per cent of middle-income countries between 2010 and 2023. India's bureaucratic efficiency score fell from 62 to 54 (scale 0-100). Brazil's dropped from 58 to 49. South Africa's declined from 67 to 52. These are not failed states. They are functioning systems losing capacity incrementally.

Countries in this condition can function for years, even decades. They collect taxes, pay salaries, and hold elections. But they lose the ability to execute complex reforms or manage long-term transitions. Policy ambition narrows. Everything becomes tactical. Indonesia's National Development Planning Agency reported in 2022 that only 37 per cent of infrastructure projects initiated between 2010 and 2020 were completed on schedule, down from 68 per cent in the previous decade.

Who ultimately pays

The cost of power does not disappear; it is displaced. Households pay through higher indirect taxes, stagnant wages, and degraded services. Businesses pay through regulatory uncertainty and uneven enforcement. Future governments pay through constrained budgets and inherited obligations they did not choose. Perhaps most damagingly, trust erodes. Citizens sense that politics is no longer about collective outcomes but about managing elite bargains.

Participation declines, or radicalises. The political centre hollows out. Voter turnout in OECD countries fell from 75.3 per cent (1990-2000 average) to 68.2 per cent (2020-2024), according to International IDEA data. Amongst 18-29 year olds, the decline was steeper: from 68 per cent to 52 per cent. At that point, power becomes even more expensive, because it must be defended against cynicism as well as opposition.

Why reform is so hard

The paradox is that systems trapped by the high cost of power find reform hardest precisely when they need it most. Any attempt to rationalise spending, strengthen institutions, or enforce rules threatens the coalitions on which government survival depends. Leaders who attempt discipline risk destabilisation. Those who do not risk stagnation. The incentives favour delay.

External shocks, financial crises, pandemics, geopolitical shifts, can temporarily force adjustment. But without institutional reset, the underlying dynamic reasserts itself. Politics resumes its inflationary path. Greece's repeated reform cycles between 2010 and 2018 illustrate the pattern. Three bailouts, six governments, multiple austerity packages. Yet by 2019, procurement efficiency had improved only marginally, administrative capacity remained low, and political fragmentation persisted.

This explains why so many countries experience cycles of reform followed by relapse. The structure of power remains unchanged, even as rhetoric shifts. Italy's repeated attempts at bureaucratic reform between 1990 and 2020 produced 14 major legislative packages, yet World Bank governance scores remained essentially flat. Brazil launched three civil service reform initiatives between 2003 and 2019; none achieved full implementation. The pattern recurs across middle-income democracies.

The long view

The lesson is not that politics must be cheap to be good. It is that when politics becomes too expensive, governance suffers. Healthy systems find ways to lower the marginal cost of power: through strong institutions, predictable rules, transparent financing, and genuine accountability. Where these are absent, the state becomes a vehicle for managing political expense rather than delivering public value.

The danger is gradual, not spectacular. No single scandal marks the turning point. Instead, capability erodes, ambition fades, and the future is quietly mortgaged to preserve the present. Singapore and Botswana demonstrate the alternative. Both maintained low political costs through institutional strength, merit-based bureaucracies, and fiscal discipline. Singapore's government effectiveness score has remained above 90 (of 100) consistently since measurement began. Botswana's averaged 72, highest in Africa. Both avoided coalition politics through dominant party systems, but crucially, both limited patronage through institutionalised constraints.

The most expensive form of politics is not the one that spends too much, but the one that spends merely to survive. When politics becomes too expensive, governance suffers. The state becomes a vehicle for managing political expense rather than delivering public value.

In the end, the cost of power is not eliminated by frugality but by structure. Countries that maintain low political costs do so not by spending less, but by spending predictably, within institutional bounds, and with clear accountability. Those that fail to establish such structures discover that power, once it becomes expensive, grows only more expensive. The state begins to consume itself. Capability declines. Trust erodes. And the public, who neither chose the coalitions nor benefited from their bargains, pays the accumulated bill.