If I remember correctly, Democracy reduces rank corruption, especially in large empires. There are two types of corruption - distance and rank.
Distance is solely the distance from the capitol/FP.
Rank is the number of cities closer to the capitol/FP than the current city. These are added together (or multiplied, I don't remember) to make the total corruption.
I believe democracy makes the 2nd piece smaller - depending on how your civ is set up, it may be significant, it may not. If you have tightspacing, so most of your corruption is from rank corruption, Democracy can help a fair amount.