This paper examines aspects of Nepal’s changing political economy by tracing the relationship between political elites and agrarian structures in the central Tarai since the first democratic revolution in 1950. Based on a review of existing literature on land reform and land distribution, as well as ethnographic material from Dhanusha district gathered during 2013 summer research, it tentatively argues that the political importance of land decreased significantly over the three decades of Panchayat rule between 1960 and 1990. In the 1940s and 1950s, land was the major economic and political resource; all top political leaders at the time came from landlord families. After the introduction of a land ceiling in 1964, however, access to patronage resources distributed through the royal palace, and later the democratic government, in Kathmandu seems to have become much more important. This change manifests itself in the social background of national level leaders from Dhanusha in the 1990s, as leaders from middle-caste, middle-peasant backgrounds started successfully challenging candidates from older elites in elections. These observations challenge interpretations of Nepal’s 1964 land reform as unsuccessful; re-distributive effects in the short run may have been limited, but it does seem to have led to a significant decline of the value of land as form of political capital, and may have contributed to the opening up of political space in the long run.