Does Star Federation improve the economy?

Yes, it does. The bonus is 30% as I recall (versus 20% for democracy and 10% for republic).

It is a funny thing, but in all my years of playing Galciv1 and then galciv2, i have never been able to notice any immediate benefit for upgrading government.

But having said that, there are few if any percentages that actually translate into what one would think is an appropriate outcome in any part of the game.

Look ath the political capital... suposedly increases influence by 20% rite? but what i usually see is an increase of more like 5%. The same goes for all other percentages as well.

But mine is not to reason why, mine is just to do or... do and enjoy! hehehe

I always go for the good governments as soon as feasable, they can provide such a boon. There have been many times where I went from the red into the black just because of a new government.

I have never had that happen? Probably because by the time i can afford to reseach it, it is no longer as critically important.

Star Federation is actually a 40% bonus now in Dark Avatar. Late beta change.

In Galciv1 I sure as heck did.

Strange? Whenever i have upgraded a government, then checked my income, it has always been exactly the same amount, or less. My guess was that the production bonuses increases that come with the new government were taking the funds?

That's exactly what happened. You got a 25% production bonus together with the 25% money bonus. Not only was it noticeable, it was unbalancing.

The game itself still says 30%, but it is listed as 40% in the manual.

And government do increase tax income. this may not be your total income, though.