The Politics of Health: Political Competition and Its Role in Reducing India's Healthcare Burden

High healthcare costs impose a serious economic burden on households in low and middle‐income countries. In India, user charges, declining public healthcare expenditure, the growing dominance of private healthcare providers, and rapid healthcare inflation have led to rising catastrophic health expenditures and increased poverty. Policymakers have come to recognize the strong link between out‐of‐pocket (OOP) healthcare spending and poverty. While some state governments have initiated reforms to address healthcare mispricing, these efforts remain limited in scope. A critical question arises: can political mechanisms drive more substantive policy responses to reduce OOP healthcare spending and regulate the largely unregulated private healthcare sector? Greater political competition can enhance government accountability by shifting policy focus toward essential public goods like healthcare and education. Such a shift aligns policymaking with the preferences of the average citizen rather than special interest groups. This paper examines this proposition both theoretically and empirically. The findings suggest that political competition in Indian states significantly reduces OOP healthcare expenditure, weakens the influence of rent‐seeking groups, and ultimately expands access to public healthcare while strengthening regulation of the private sector. The study contributes new evidence to the political economy of health in India by demonstrating that electoral competitiveness can enhance financial protection in healthcare.