For the Empire to actually exist as an institution, it needs to have the mechanisms in place to exist – namely, donks like Queen Amidala and Senator Jar Jar Binks who basically just sit around and handle boring government work. And you also need people everywhere. Like, if the Emperor controls everything, he needs to make sure every Speeder Registry office in every settlement on Tattooine has somebody working the counter except during major Imperial holidays. And he needs to pay them something (they can’t all just be clone slaves – that’s clearly not how the Empire works). If you don’t pay your people, they tend to first, be lazy, second, take bribes and be likely to betray you, and third, leave their posts or actively conspire against you.

To maintain order, the Emperor would generally need a MASSIVE, MASSIVE bureaucracy. The Old Republic built up a serviceable one over thousands of years, but that took a lot of time, money and effort, and in the end it was bloated, ineffective, and ultimately subverted against the Old Republic.

The more you spend on bureaucracy, the less control you have directly over your Empire. The less you spend on bureaucracy, the more you have to tighten your grip, and the more star systems slip through your fingers.

So, the Emperor and Tarkin focus on making one really huge, high-impact investment: The Death Star.

via Think Tank: The Economics of Death Star Planet Destruction » Print | Overthinking It.