Monarchy SUCKS! I mean, it's good in the early game (when your only alternative is despotism), and I always try to get it quickly to reduce the resource penalties and corruption of despotism, BUT once you can move out of it, you definitely should, because otherwise the corruption is so damned high that your outer empire won't have ANY trade (and as we all should know, trade=science, and trade=happy (as versus content) citizens!), and it won't grow that well....
I change to republic as soon as I can, and put luxuries at 20%--happiness usually INCREASES then, since corruption is reduced and some of that extra revenue (along with the trade bonus on trade squares) can thus be channeled to luxuries. 20% should offset away unit unhappiness, as long as you distribute support of units fairly evenly to all cities (until you build Shakespeare's, then since you have a city that will NEVER have unhappy citizens, you can have that city support as many away units as you want). Try it--your science will go from one discovery every ten turns to one every four, EVEN if you have to reduce the science rate a little to provide luxuries). AND when your cities start celebrating because of increased trade (and luxuries), they gain one pop every turn, and as they grow, they produce even MORE trade (and thus more science).... Then it's a discovery every three turns, or every two....
Democracy is a little trickier transition from republic than republic was from monarchy, and like I said I usually wait until I have Mike's Chapel at least (if I don't already) before I move on to that. But now, since democracy ELIMINATES corruption, all THAT extra money goes into my treasury--and I find I can easily bump luxuries up to 30%, keep science at around 50%, and bump taxes down to 20% and still pay all the bills... and my science rate jumps to two turns per discovery, eventually even one.... In late game I'll even go as high as 40 or 50% luxury and let all my cities max. And once my cities have built everything they need to build (VERY late game), and I turn their 50 or more shields apiece to capitalization, I can set luxuries at 60 or 70 percent, ELIMINATE taxes, and STILL pay all the bills with the capitalization alone (of course, I usually have Adam Smith's to help me with that, too).... I do this mainly to increase my score (since happy citizens give you two points each). I also love seeing those solid lines of goblets representing the magnificent decadence of my citizens living in splendid luxury....
Not to mention, none of my units or cities can be bribed at ANY price....
As for the senate, well, they're just a minor irritation. If you want a war, just keep telling your enemy to withdraw his troops (even if he has none in your territory), or send a freight into the middle of his empire and have it sit there as a big, juicy, tempting target--sooner or later they'll bite, then you can PARTY! Oh, and if you have the UN, oftentimes they'll allow you to continue your "peacekeeping mission" and ravage the sh*t out of your rival, even in democracy <IMG SRC="http://forums.civfanatics.com/ubb/smile.gif" border=0>.
Read what I said above--others here have posted similar things before, and at first I was skeptical too. But pay attention to your economy, build the suggested wonders (especially Mike's, Bach's, and Suffrage, but also Shake's to support most of your "away" units and your navy), and soon you'll be wondering why you EVER avoided democracy.... It simply kicks ass like nothing else!
[This message has been edited by allan (edited August 23, 2001).]
. This kinda defeats the point of moving to Democracy at all....... 
