Still on vacation. Just popped in to remind you guys that realism still isn't a meaningful argument. Development is meant to occur more in countries that do not expand. It was too extreme when every opm ended at 60+ dev but it's fine as it is now.
The Baden example was just to illustrate how selectively and arbitrarily people give a damn about realism (the end result of almost every country played by a competent player will be deeply unrealistic)... which is why it's not a meaningful argument. As I keep saying.
Hope you're having a good one

. On the whole realism thing, realism in-and-of-itself isn't an argument, but having some care to realism helps use history as a natural 'balancer' - the further broad-brush outcomes of game mechanic vary from realistic (noting that what actually happened during this period in many areas, military, economic and social is still contested - so we don't always know what 'realistic' is), the more other mechanics need to be put in place to get results that are realistic enough to be immersive. For example, at the moment, the westernisation path is deeply un-immersive for me personally - it may make for a better balanced MP game, but you can't have a great, balanced MP game and a plausibly historical grand strategy game at the same time, as history was deeply, deeply unbalanced.
On this particular issue, I think the biggest problem is the way that there's little relationship in terms of available monarch points in the game and historic nations capacity to govern at particular points in history (particularly in the later game, as the development of the institutions of Government meant that the capacity of Government was far less limited by the capacities of a particular monarch or president - and even early in the period, relatively incapable rulers were often compensated for by advisors that did a lot of the actual ruling).
Say, for example, a small (two province) duchy gets a kick-arse ruler (say 5-5-5), and Hungary (a small Kingdom, say seven provinces) gets a 1-1-1 ruler, and that Hungary, because of its income, can support a couple of 1-point advisors. So you have 24 MPs a month for the duchy split over two provinces (12 MPs/province/month), and 14 for Hungary split over 7 (2 MP/province/month) - so lucky small duchy has around six times the development potential (holding tech and ideas constant, as the cost doesn't change by nation size) as unlucky Hungary. Even if Hungary was just as lucky with its ruler, it would still only have around 3.4 MP/province in terms of development, so still less than a third the development potential.
While I'd agree that a Monarch/President's capacity had diminishing margine returns the larger a realm grew, I'd argue that the returns, as they're modelled by MPs in EU4, drop for too fast, and that this relationship is at the core of the difficulties in balancing EU4's various mechanics. The reason for this is that MPs are designed to do two jobs - look after 'realm-sized' issues like tech and ideas, but also 'sub-realm' issues like buildings (pre-1.12) and development (1.12 and up), as well as rebellions, that scale with the size of the realm - so balancing between different sized nations will never be perfect because the model is trying to reconcile two functions that can't be married together - so on one end you get one-province nations having a very high MP/province/sub-realm issue ratio, and huge nations having very low ratios.
Argh - crook at the moment - I think the above makes sense, but if it doesn't, I apologise to whoever read it for the trouble. Also, fixing the issue with the MPs trying to do two things that don't work in harmony with each other won't sort the tall vs wide issue. That's probably better addressed by properly modelling how expensive wars actually were, either by MP maintenance costs for maintaining large armies or perhaps have a 'home' for regiments, and if the regiment is away from home, give them an extra supply cost? If you scaled the supply cost for distance from home, it'd even provide a rough'n'ready logistics-alike - that's very rough, would need refining, and thoughts may be rubbish, just trying to help

. EU4 is already a tonne of fun, and my second-most played game ever - thanks to you, Johan and the team for all the work you've done on it so far

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You are confusing realism with immersion/flavor.
Immersion/flavor is playing a WW2 shooter and using a mosin-nagant instead of a laser gun - this is important.
Realism is playing a WW2 shooter and having to spend 2 months in hospital everytime you get shot - stupid and detrimental to gameplay. Nobody actually wants a realistic game, which is why realism arguments are so selectively used.
Even that result for a WW2 shooter is a tad on the 'easy' side if you're looking at proper, realistic results

. Imagine a 'realistic' CK2?!