After independence Algeria became a revolutionary Arab-Islamic socialist republic with the National Liberation Front (FLN) as the only legal political party. Centralization, socialist bureaucracy, leftist revolutionary politics and the practical suppression of Islamic activism subverted the country's social development and set the stage for the fundamentalist backlash of the first half of the 1990s.

The severe repression of an active populist Islam discredited the government's Islamic pretensions and led to a resurgence of grassroots populist Islam manifest in the Islamic Salvation Front (FIS). In response to the country's intensifying political crisis, a new constitution was approved by referendum in 1989 establishing a multi-party democracy.

The new constitution calls for a president elected to a five-year term and one 295-seat legislative house called the National People's Assembly. The elected president of the republic appoints a prime minister and a cabinet of ministers. The new constitution led the way to general elections held in December 1991 but when the Islamic Salvation Front (FIS) won 188 seats in the Assembly and the FLN just 15, President Chadli Benjedid stepped down and a military junta assumed control, establishing a Higher Council of State.

The second round of elections was never held, igniting widespread protests. A state of emergency was declared and the FIS was banned, exacerbating political violence. Western support for blatantly anti-democratic political repression caused the most extreme dissident elements to direct violence to foreigners.

In early 1994 a transitional president, Liamine Zeroual was appointed. Zaroual, a former minister of defence, made efforts to open dialogue with the banned FIS which led to elections in 1995. How government will deal with the deep divisions within the country remains to be seen.

Efforts toward decentralization have been most successful in the provincial administration of 48 wilayat or provinces, each governed by a wali or provincial governor, assisted by an elected executive council. Each wilayat is divided into municipalities called dayrat. Each town has an elected municipal assembly. Since the establishment of the 1989 constitution, the government has given more independence to provincial government.

Algeria's judicial system is formed of a Supreme Court located in Algiers, three courts of appeal, special criminal courts for economic crimes against the state located in Algiers, Oran and Constantine, justices of the peace and commercial courts in cities and townships throughout the country. The Supreme Court serves as both the highest appellate court and as the council of state.