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How do colonial property rights policies impact political development post-independence? Scholars of economic development have found robust differences between the institutions created by direct and indirect colonial rule. However, it is less clear how such institutions may vary sub-nationally. This paper uses the case of colonial Iraq and shows how British indirect rule varied across provinces. Using a unique subnational dataset of Iraqi liwas from 1929 to 1965 and archival records from the British Colonial Office, this paper shows how colonial administration implemented exclusive land tenure and tribal policies that led to reduced state capacity in districts dominated by landed elites. These areas continued to have lower levels of state institutions important for inclusive state building, particularly public education and policing.