The EmergencyMost, if not all, accounts suggest that one key triggering event that has helped tip the balance of power was the brief period of emergency rule. In 1975, the president of India—acting on the advice of Indira Gandhi—declared a state of emergency, which suspended the constitution and centralized an unprecedented degree of power in the hands of the prime minister and, by extension, a small group of political and bureaucratic insiders. The Emergency, which lasted less than two years, involved curbs on freedom of expression, arbitrary detention and arrest, overt political pressure on the judiciary, and the further politicization of the state and represented the nadir of political sycophancy within the Congress.The Emergency was in many ways the culmination of a decades-long process of hollowing out of the state apparatus. The debasement of state authority and the politicization of virtually every tier of government further infused politics with individuals harboring criminal ties.As the internal democratic structures of the Congress were progressively eliminated, the party began to resemble a pyramid-like organization responsible only to the very top. Loyalty to Indira and Sanjay Gandhi (Indira’s younger son and closest political adviser) took precedence over all other criteria. It was during the height of the emergency period that a raft of political cronies tied to Congress—less charitably described as goondas and linked especially with Sanjay—became important power brokers in the party. This brief period saw the sharp rise of what came to be called “Sanjay culture” in India, which refers to the young Gandhi’s induction of many criminals and thugs into positions of leadership in the Congress. Over time, it has become shorthand for the marriage of crime and politics.Congress was voted out of office in 1977 after Indira called surprise elections and brought an end to the Emergency, but it would once again climb to power in 1980 following the collapse of the brief rule by the Janata government. Congress underwent another split following the Emergency with the largest faction renamed Congress(I); the “I” stood for “Indira”—a telling detail about the state of the party.Rane Prakash/HT PhotoIt was during the emergency period that a raft of political cronies tied to Congress became important power brokers in the party. Indira Gandhi receiving the Bharat Ratna on 26 January 1972.Although politics was churning at a rapid clip, the shift of criminals to the forefront of politics gained unstoppable momentum. The Emergency may well have served as a proximate trigger for a more direct incorporation of criminals in the electoral mainstream. But this brief nondemocratic interregnum came on the heels of trends that had been building up for many years. Furthermore, the Emergency itself does not adequately explain why criminals felt the need to become politicians themselves, having toiled successfully in the service of politicians for several decades.Vertical IntegrationTo understand what propelled this change in strategy among criminals, it is important to look at the human motivations that pushed them more squarely into the electoral domain. Returning to the marketplace analogy, I argue that criminals adopted a strategy of “vertical integration,” a concept popularized by the Nobel economist Oliver Williamson.Vertical integration refers to the “substitution of internal organization for market exchange,” or the merging together of two businesses that are at different stages of production. Think, for example, of an auto manufacturer that decides to make its own tires in-house rather than contract with a third party to manufacture them.When do firms operating in a competitive marketplace typically seek to vertically integrate their operations? According to Williamson, when markets work well, there is typically little need for firms to prefer internal supply to the external contracting of goods and services. But when markets fail to work efficiently—for example, when contracts are incomplete, ambiguous, or lack finality—firms might shift production in-house, thus vertically integrating. It turns out that this is roughly the position criminals working with politicians in India found themselves in during the 1970s.When Congress was the dominant player in Delhi and in the states, there was little doubt about which party would be returned to power once elections were over. Of course, there was electoral competition in most parts of the country, but there were few viable players other than the Congress. Thus, from a criminal’s perspective, working as an agent for hire for Congress made eminent sense. Criminals demanded money and protection in exchange for helping politicians with their work during the height of election season and were virtually guaranteed employment for the next go-round after their candidate was elected. In other words, Congress could credibly commit to upholding its political contracts, and criminals were accordingly rewarded after the election.However, incentives began to shift once the era of Congress hegemony gave way to greater fragmentation. Between 1951 and 1966, incumbent state governments were virtually guaranteed reelection; during this fifteen-year period, the incumbent reelection rate stood at 85 percent. As a result, there was a semblance of political stability and predictability in electoral markets. That changed in subsequent decades: between 1967 and 1979, incumbents won reelection just 54 percent of the time.At this stage, criminals faced a complex dilemma. Thanks to the uncertainty stemming from greater electoral competition, they were no longer able to rest easy knowing that the party that employed them would remain in power. Congress was, in other words, no longer the only game in town. This shift drastically increased the uncertainty associated with contract negotiations. In the event that Congress lost an election, a criminal in the employ of the party would have to negotiate a new “contract” with the party in power and would be at an obvious bargaining disadvantage. Alternatively, the criminal could try to negotiate multiple contracts with parties, but this would, if nothing else, complicate decision making. The danger, of course, was that the criminal would be left out in the cold, vulnerable to the retributive whims of the state that he had previously been protected from. Any ex ante promises of protection were now “too tenuous to guarantee their safety.”HT PhotoIndira Gandhi with son Sanjay Gandhi at the All India Congress Committee meeting in 1978.The pursuit of protection was a crucial objective for aspiring criminal politicians. Candidates charged with engaging in illegal activity first sought elected office because they feared the reach of the state, and politics offered a promising mechanism for evading prosecution.While politicians in India do not have formal immunity from criminal prosecution, officeholders can rely on the trappings of office to delay or derail justice, such as the power to transfer public officials. In the words of the Supreme Court of India, the slow motion of justice “becomes much slower when politically powerful or high and influential persons figure as accused.”The protection criminally linked candidates seek is not only from the state—in some cases it is from their rivals. The politicization of state institutions means that the state does not act as an entirely neutral arbiter.This lack of impartiality allows politicians to manipulate the state according to their whims, leaving those outside government vulnerable to state crackdown. In pockets of the country, there is anecdotal evidence that some criminal politicians contest elections where their rivals have decided to do the same, reducing elections in these constituencies to a choice between rival criminal politicians.In the wake of uncertainty prompted by chaotic “client-shifting,” a rational solution to this challenge was for criminals to move from outsourcing political protection to doing it in-house. In other words, the solution rested in becoming politicians themselves. By directly contesting elections, criminals could reduce the uncertainty associated with negotiating (and renegotiating) contracts with politicians, all the while retaining the benefits they had previously depended on Congress to deliver.Bypassing politicians and directly contesting elections was a natural response by criminals not only to political market failures but also to obvious status concerns. Many politically savvy criminals eventually realized that, having worked in the service of politicians to win elections, they had accumulated enough local notoriety to contest elections directly. Over time, criminals had acquired a considerable amount of social capital as a result of their ethnic bona fides, their reputation as fixers, their access to resources, and their roots within local communities.This social capital gave criminal entrepreneurs useful leverage they could now exploit in the political realm.The alleged gangster Ashok Samrat, who contested elections in north Bihar, summed it up best: “Politicians make use of us for capturing the polling booths and for bullying the weaker sections. But after the elections they earn the social status and power and we are treated as criminals. Why should we help them when we ourselves can contest the elections, capture the booths and become MLAs and enjoy social status, prestige and power? So I stopped helping the politicians and decided to contest the elections.”Once the vertical integration process took hold, it was difficult for it to be undone. Criminals now had both the status and the power; having invested in building up their local electoral machinery, they found that the costs of reversal far outweighed the benefi ts, particularly as electoral uncertainty further intensified.If criminals decided to take the electoral plunge and become fullfledged politicians in their own right, it begs the question: why did criminals-cum-politicians tie up with political parties rather than strike out on their own and contest elections as independents? There are several possible answers. For starters, although party labels in India possess very little programmatic content, parties are still connected to distinct leaders, families, ethnic groups, and social bases. Aspiring candidates can tap into these networks to expand their appeal beyond their own narrow support bases. Although political parties may not have clearly distinct views on, say, the welfare state, that does not mean that party labels are devoid of meaning. It is entirely possible that these labels also have some normative appeal for potential candidates as well.Second, in a country with high rates of poverty and illiteracy, party symbols hold great weight; they serve as an important visual cue through which millions of voters connect to electoral politics. As such, the historical legacy of parties matters a great deal in Indian democracy.To this day, many voters support Congress, for instance, because their families have done so since the days of the independence struggle. The available evidence suggests that the party imprimatur remains vital for maintaining electoral relevance. Of the 4,300 MPs elected between 1977 and 2014, a mere 1.4 percent (or 82 in total) were independent candidates. Given that independents accounted for over 56 percent of all candidates, their lack of electoral success is even more striking.Excerpted with permission from When Crime Pays: Money and Muscle in Indian Politics, Milan Vaishnav, HarperCollins.