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Realism and game functionality are compatible until proven otherwise
The following is by no means an exhaustive description of what VRRP does, but should give an overview of its general state and planned future.
The Victoria 2 Realism & Rebalance Project (VRRP short) is an effort by the undersigned to rework Victoria 2 from the bottom up along realistic and consistent principles. The ultimate objective is to create a world which is completely dynamic and self-regulating to the extent that the world economy will always be able to reach a long-term equilibrium regardless of its current condition. Each aspect of the game interacts with the others to achieve that aim. Economic rebalancing is the original heart of VRRP, but over time, it has expanded to cover many more aspects of the game, and intends to expand further. VRRP is simulationist in outlook, avoiding arbitrary, unrealistic balance limitations. If something would not have been possible in real history, it should be impossible in VRRP too through proper simulation of the underlying causes that made it so, not via a hard rule saying you can't do so.
Factory and RGO inputs and outputs have been redone from scratch starting from initial assumptions about inherent profitability in a long-term equilibrium. Most RGOs are equally inherently profitable, though a few corresponding to rare resources that can only be produced in a few places have slightly higher profitabilities. The inherent profitabilities of factories scale nonlinearly with build cost, the most capital-intensive (shipyards and machinery) having an inherent profitability 1.5 times greater than a common factory, whereas a "dirt cheap" factory on the other end of the range is only 0.75 times as profitable. Profit margins of factories (output price minus input prices) have deliberately been made narrow to prevent profitability when supply is far above demand, and consequently, most factory output inventions have been changed to increase throughput. The cheaper the factory, the smaller the relative profit margin per unit produced is, making cheap factories more vulnerable to adverse market conditions, but also make them benefit more from output-boosting effects. A paradigm of preservation of mass has been adhered to in production, total amount of inputs matching total amount of outputs, with the exception of certain large items such as artillery and ships, and goods whose production process can be considered fuel-intensive. This makes amounts of goods comparable to each other. At the beginning of the game, factories are scaled to only be slightly more profitable than artisan production, but the gap will grow larger over the game, forcing artisans into a few niche goods such as luxuries, for which they have a higher inherent profitability.
Good needs have been reworked thoroughly for economic rebalance. All POPs eat the same number of units of food as life needs, though richer POPs eat a higher proportion of more expensive food (fish and cattle), whereas poor POPs eat almost entirely staple food (grain). All POPs further have a certain amount of food as everyday needs, representing slight income elasticity of demand. Everyday and luxury needs of all POPs have been massively expanded to make sure POPs will always have something to spend their money on, keeping it circulating and preventing late-game economic stagnation from lack of demand. Capitalists in particular have massive luxury demands. Also, to model income elasticity of demand, several everyday goods are also found as duplicates in the luxury goods cathegory. As need fulfilment has been made relatively more difficult, all effects following from them have been rebalanced; now 25% everyday needs is considered the "balance point" where a POP is not discontent with its standard of living.
Factory build costs have been driven up greatly to make capital accumulation the most common limiting factor on industrial growth, rather than rate of craftsman promotion. To compensate and make it easier for capitalists to start industrialization under laissez-faire, factories have been divided into smaller levels, each holding only 5000 workers. Machine parts have been made to account for a greater relative part of build cost in order to deliberately make their availability another damper on the rate of industrialization. Likewise, railroads have machine parts as a build cost, representing steam engines. The role of coal as an all-important resource as the fuel steam engines ran on is represented by making it the main upkeep food for factories and a part of the build cost of railroads.
Production relations between goods have been reworked to make every good relevant in significant numbers and capable of being profitable. Ammunition is its own final good, consumed by military units, rather than an input of small arms and artillery. Fertilizer and explosives are taken out of the military production chain entirely and life needs of aristocrats, representing a "maintenance cost" for their boost to RGO output (which has been increased consequently); also, explosives are used to build railroads. Canned food is not only consumed by military units but also by craftsmen and clerks, representing the greater need for food processing to feed urban populations.
The effects of all economic policies have been reworked for realism and rebalance. Minimum and maximum tax rates are done away with, working poorly together with tax efficiency and gimping Laissez-faire. Interventionist governments can build but not expand factories, and cannot open nor close them. Capitalist build cost has been greatly reduced for Laissez-faire and a bit for Interventionist. Also, Laissez-faire gives a direct boost to POP promotion to capitalists. Education and administration costs have been increased significantly, and the max cap of intellectuals (clergy) that give RPs has been bumped up to 5%, making them the main source for RPs and a possible major money sink for countries with such an emphasis.
A detailed migration system has been put into place, driving POPs not only towards countries with more reforms but also towards where the money is. RGO profitability is both a major push and pull factor, making POPs evacuate RGOs whose goods are overproduced and be attracted to RGOs whose goods are underproduced, reacting dynamically to world market conditions.
POP promotion and demotion has been reworked properly to make a country's population structure find a stable condition-dependent equilibrium. All poptypes have a constant chance to "promote" to themselves to work around the problem of total promoted amount being constant, preventing aberrations such as massed soldier promotion in the absence of other promotion options. Several poptypes get negative modifiers for promotion to them depending on their existing numbers. Capitalists and aristocrats have been made to start demoting on getting less than 100% everyday goods, making their numbers stable when they are few but decrease their numbers when there are many of them to share the same income cake. Officers demote to soldiers at a constant rate and to nothing else, while soldier promotion to officers is proportional to literacy and military spending, leading to the ratio of officers to soldiers being stable in the long run.
Assimilation has been greatly toned down, removing auto-assimilation upon promotion almost entirely. Colonial populations are far more inert than state populations, both when it comes to promotion and assimilation.
The cost of war has been increased significantly, military upkeep costing four times as much during wartime than peacetime. Land unit attack and defence values have been reworked to account for the new meaning of attack and defence values in vanilla v1.2: Artillery, for example, now has both huge attack and defence values, but very low discipline to make it unable to last long in the first line. Province supply limits have been doubled to make warring with historical army sizes actually feasible. The naval tech tree has been reworked completely, letting one branch give new ship types, another weaponry, and a third armour. Having a first-rate navy now requires researching all branches; furthermore, technical advances in warfare reduce ORG due to the changing nature of war making old doctrines and methods obsolete, making researching ORG-increasing "soft" naval tech more important. Most importantly, older shiptypes stop benefiting from weapon and armour upgrades after a while into the tech tree, making old ship types actually go obsolete. Another heavy ship, the pre-dreadnought battleship, has been added to fill the space between ironclads and dreadnoughts. Now, there is always a competitive light and heavy ship at every tech level.
The above is simply the current state of VRRP. Much yet is being planned. Here are a few highlights:
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