Galactic Civlizations 2 Guide: Economy
It's the economy, stupid. This phrase has been used to explain countless political and social phenomena, and it can also be what is needed to succeed at Galactic Civilizations 2. The unique economic system in Gal Civ 2 makes it important to strike a balance between population and tax rate.
Galactic Civilization's II has a very interesting economic system, which is at once complex and simple. It will, of course, be necessary to understand all aspects of the economy in order to play as effective as possible, but to defeat the clever AI on even medium settings, you'll first need to understanding the basics of taxes and production.
Your income is largely based off taxes. The more citizens you have, the more tax revenue you will receive. Anyone who has played a turn-based strategy game already understands this concept. And because Gal Civ 2 uses a tax-based income model, the assumption that more is better applies. In general, it is better to have a larger population, it is better to have a larger number of economic buildings, and it is better to have more planets. There are some restrictions to this assumption, the largest of which is that overcrowded planets incur morale penalties, and these penalties can eventually become so severe as to undercut the benefit you receive from having a larger taxable population. But generally speaking, you'll want to make sure your planets are reaching their population caps quickly, that you're aggressively trying to acquire new planets, and that you're aggressively building economic structures.
The second important fundamental however, is that production costs money. This is a concept that is not always used in turn-based games. Many of the Civilization games, for example, use a system that keeps industrial production and economic revenue more-or-less separate. This isn't the case in Gal Civ 2, because every unit of production must be paid for out of your economic revenue. There are three units of production, those beings Military (Spacecraft), Social (Planetary Improvements) and Research (Researching Technology). No matter which unit of production you're speaking of, putting ten units into production will consume 10 galactic credits (there are important exceptions, mentioned later). This means that your industry is dependent completely on your economy. You can have a thousand factories, but they will produce nothing if you don't have the taxes needed to use them.
Therefore, the general basis of all economy in Galactic Civilizations II is this: find a balance which allows you to increase your revenue as much as possible, so that you can produce as much as possible. If you are experiencing a shortfall in revenue, then you re-balance your economy by reducing production. But obviously, such a strategy will need to be temporary - otherwise you'll find yourself falling behind your enemies.
Once you have the fundamentals of the economy down, you can further improve by stacking bonuses. These come in two forms - one is empire-wide bonuses, and the other is local bonuses granted by economic starbases and resource starbases.
Empire-wide bonuses can be gained at race creation, by random events, and by building certain important structures. Two obvious bonuses to strive for are economics and morale bonuses. Economics bonuses will give you more revenue from your population, and morale bonuses will allow you to tax your people at a higher rate without the risk of assassination. Other bonuses you should consider however, are production bonuses. These bonuses are great because bonus production doesn't cost as much as normal production. Generally speaking, it only costs half. This means your production will be more efficient than that of your opponents, which can allow you to produce more warships than your enemy even if your economy is less successful.
In addition to empire-wide bonuses, you can also increase revenue by stacking economic starbases and by building resource starbases. Economic starbases can have modules added onto them which will increase the revenue of nearby trade routes and the production capabilities of nearby planets. Stacking a few starbases in the same area will result in a major increase in revenue and production capability. Building resource starbases is also important, because it allows you to harness empire-wide bonuses which inevitably improve your bottom line - even the military ones change your economy, because they allow you to build better ships without spending more cash on them.
Morale, Production, And Taxes
One of the most important decisions you'll have to make regarding your economy is balancing your population and your morale. The relation between these two factors is crucial. Population obviously increases the amount of people you have which can be taxed, and therefore can increase revenue. Increasing your empire's taxes will hurt morale however, and over-population can make morale plunge even lower. As a result, you'll need to balance your morale and population constantly. An empire with a very large population won't be able to make much money if its people are so unhappy that taxes need to be very low to appease them, and likewise a very happy empire with a high tax rate will still run into problems if there isn't enough people around to tax.
Finding a good balance between these things is up to the player, because the relation between them has implications beyond economics. For example, if you choose the higher-population, lower taxes route, you'll have an easier time finding people to put on your troop transports. On the other hand, you'll also have a harder time getting new planets to generate their full income, because you'll have to wait until their population is high.
Balance Is Key
There is one rule that should always be followed; once you have colonized all the planets you can and your population has reached a respectable level, you should tax as much as possible without having your planets become prey to uprisings - always, without exception. This means an empire-wide approval rate of around 60-70%. Also note that the maximum tax rate is effectively 80% - the game has a mechanic which causes approval ratings to drop off dramatically once taxes are raised past that mark. This means that investments in morale are only worthwhile up to the point of having an empire-wide approval of 60-70% with a tax rate of 79%.
If your economy does not appear to be going well, fiddle with your tax rate, with the population on your planets, and with the amount of economic structures you own. Finding a balance between your tax rate, population, and production is key to economic success in Galactic Civilizations II.