Political structure as a legacy of indirect colonial rule: Bargaining between national governments and rural elites in Africa

•This paper provides a model to understand when a national government cedes resources to rural elites.•Powerful rural elites impede the government from collecting revenue in rural sectors.•Thus, the government has a weak bargaining position when facing powerful rural elites.•The government invests in the capacity to control rural regions (coercive capacity).•If the government does not ally with rural elites, its coercive capacity is increasing in rural elites' power.

Alliances between national governments and rural elites are observed in postcolonial Africa. Governments rely on rural elites to control rural regions, guaranteeing them a degree of authority and revenue in return. This paper provides a model to analyze the forging of such alliances. Without cooperation between the national government and rural elite, the power of the two competing authorities to compel farmers' obedience determines the revenue of the government extracted from cash crop production. Hence, with a powerful rural elite, the national government has a weak bargaining position and agrees to a large transfer to the rural elite. Furthermore, the government's capacity to compel rural residents' obedience is endogenously determined by the level of cash crop production and the power of rural elites. Because indirect colonial rule is a significant source of the elite control over residents in rural areas, cross-regional variations in colonial policies lead to various forms of postcolonial alliances between African national governments and rural elites.