Selecting a government is important to your economy. Government types effect the cost of the various items that will be purchased as your planets, fleets, defense and colonies are being developed.
Dominated by corporate and banking influences, this form of government excels at creating economical cargo and colony ships. The corporate government will do anything for a fast profit. They are not efficient at building hydroponic farms, cruisers or large ships-of-the-line.
Democracy is a form of government in which the people, using a free electoral system, select their leaders and approves their own laws. Because leaders are selected by popular vote, and those leaders tend to support the desires of the masses, this is also known as government by mob rule. Democracies are able to produce cheap escort ships and heavy Planetary Defense Bases (PBD). However, mines and stealth ships are more expensive.
A dictatorship a form of government in which the political power is held by a single, self-appointed ruler, without hereditary ascension. Dictatorships can produce stealth, cruisers and ships-of-the-line easily but civilian ships and factories cost more than average.
The feudal form of government is composed of reciprocal legal and military obligations among the warrior nobility. These obligations revolve around the concepts of lords, vassals, and fiefs. As such, they can produce cheap light PDBs and escort ships. However, it costs more to build heavy PDB and factories.
A monarchy is a form of government in which supreme power is held by a single individual. Often supported by a noble class, the hereditary government leader holds that power for life or until abdication. The Monarchy can construct inexpensive Heavy PDBs, as well as, cruisers and ships-of-the-line but does not seem to be able to produce either cheap mines or medium PDB.
A Socialist government advocates state or collective ownership of wealth. In addition, it administers production and distribution of goods. It strives for equal opportunities for all individuals and a fair distribution of wealth. Because of over breeding and massive populations, the Socialist government can always create modest civilian ships and medium PDB. However, power plants and light PDB seem to be more costly.
Theocracy is a form of government in which a god or deity is recognized as the supreme civil ruler. Typically, the state is governed by officials who are regarded as divinely guided. Because of their religious fervor, Theocracies excel at producing inexpensive civilian ships and heavy PDB. However, the escorts and power plants cost more to produce.