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I was surprised to learn that keeping the number of rebels low is actually quite easy.
1) Your Constitution Military Policy needs to be set to Pacifist Nation.
2) NEVER Arrest or Institutionalize a Rebel.
Military <--> Rebels are a vicious cycle. The bigger your Military, the more Rebels there are. Punish a Rebel and his/her entire family joins the rebellion. You really don't NEED a Military anyway.... unless you are playing with Pirates or angry superpowers. But it's not that hard to keep the superpowers happy: just keep on making Trade contracts with them.
So skip the Military and when you look in the Almanac/People/Special People you will see that you rarely have more than two Rebels. And without there being dozens of Rebels, the Guerrillas never appear.
That might well be the solution, but it is disappointing that the military solution doesn't work. I always have quite a lot of installations around my palace, but they seem a bit useless. Still, I wish it would mirror reality. Despotism fails often, but often works. Anyhow this game is about being a Caribbean dictator. A giant, not necessarily useful army, is a prerequisite.
Rebels and Guerrillas are definitely NOT a fun aspect of this game.
the lower the freedom, the higher the chance that unhappy people join the rebellion.
Also there is an edict in modern times that convices rebels to become normal people again.
BTW, if you select a Religious candidate to be Minister of the Interior, there is a percentage chance that Rebels and Criminals will drop their status and become normal citizens again. (I'm not sure how often or when that status change gets checked.)