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Collab governments are great.
Doing the mission gives 30% or 45% with bonus collab. If you beat them, it increases initial compliance. It also lowers the surrender threshold.
Once it hits 80%, you can set up a collaborarion government puppet (non-democratic), which get the fun names like "French Italy" or "Japanese China" which give you loads of manpower and IC.
The "Prepare Collaboration Government" spy operation doesn't provide benefits to setting up a puppet state. What it does is decrease the surrender limit for an enemy nation and once you capitulate that nation will automatically set the compliance of that country to a higher level depending on how many of those operations you completed.
I hope this helps
So collaboration government seems to be better.
When might one prefer the puppet option? Is it mainly a matter of effort/preparation?
Collaboration governments are best created with use of the spy operation 'Prepare Collaboration Government', perhaps carried out two or three times, which requires months of preparation work with two operatives, as well as taking up civilian factory production for a time and weapons.
Puppet states, on the other hand, can be created when an enemy country capitulates, with no other planning required.
Is this correct, and the main factor in choosing between them?
So if you know you're going to conquer a place, and have a few years of prep time (e.g Germany), it can be worth it. Otherwise, puppets are great for just saving your time and manpower.
I'll just add that the spy operation 'Prepare Collaboration Government' is also great for annexing, as when the message comes to let the collaboration government form, one can just say no with seemingly no ill effects.