The Compromise of 1877 affected the politics of the South because it formally ended the Reconstruction Era. Rutherford B. Hayes pulled US troops out of the Southern states of South Carolina and Louisiana. This move led to the loss of political power by black Republicans in the South and led to the election of politicians who would significantly increase racial discrimination and the disenfranchisement of black voters.
Northern capital interests thought they would largely be benefited by the compromise, which built an additional transcontinental railroad. This and other elements of the compromise opened up the South to Northern industrialist interests. However, these points of the compromise were never enacted. The compromise also guaranteed that the North would cease to interfere with how the South wanted to politically oppress black people.