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Civilization II Hints
Corruption and Waste
Corruption and waste eat up valuable trade and shields that really needn't be lost. These two problems become worse as your civilization spreads farther and farther from your capital.
Higher difficulties and lower forms of government also increase your losses. In fact, under Despotism corruption and waste are almost doubled. These problems can be easily dealt with or done away with all together. Building courthouses will reduce your corruption and waste by half. Connecting cities to your capital with roads or railroads will also help to ease the situation.
Simply switching to either Communism or Democracy will do away with the problem all together, so do this immediately if you have the advances to do so.