Chancellor Sheev Palpatine of the Galactic Republic perfectly described the state of the Galactic Republic during his time as Senator of Naboo, when Naboo was invaded by the Trade Federation. He stated to the then Queen of Naboo, Padmé Amidala, "The Republic is not what it once was. The Senate is full of greedy, squabbling delegates. There is no interest in the common good."
For centuries, the Galactic Republic's lucrative trade with Core World markets helped it inexorably pull non-member worlds into closer cooperation with the body politic. Although Supreme Chancellor Lina Soh tried to fully bring the Republic into the Outer Rim Territories during the High Republic Era through her massive outreach programme, only to be met with fierce and bloody resistance from the Nihil marauders, senators came to fear that the addition of new member worlds would appropriate their own wealth to protect "provincial territories," far from the civilised and cosmopolitan Core.
As a result, states were often left waiting—some for centuries—to be admitted into the Republic, while those that were admitted found themselves largely ignored in the chaotic senate chamber. Local power blocs soon emerged from neighbouring star systems in the galaxy's periphery, demanding greater representation and rights for their own respective sectors.
Over time, senators of the Republic began prioritising their own interests above the common good, slowly eroding the foundations of democracy that initially built the Republic. The Republic also appeared to be unwilling to do anything about the crime syndicates that were in the Outer Rim but also in the Republic's own territory, with the people of the Outer Rim believing that the Republic had abandoned them in favour of the richer Core worlds that also held greater influence in the Republic.
Planets such as Vallt lacked trade, respect, and fair representation even though they were members of the Galactic Republic, while powerful corporations like the Trade Federation found themselves with representation within the Galactic Senate while they were blatantly exploiting loopholes for greater profits. This allowed them to lobby for their own interests, which were often in conflict with the interests of the citizens of the Republic, which caused the Senate to weaken.
The people of the Outer Rim mostly distrusted the Jedi due to their alliance with the Galacitc Republic. This alliance saw the Jedi working and fighting for the Republic as trouble shooters and diplomats. The Jedi also served as Republic warriors and commanders, despite the Jedi officially claiming themselves to be peacekeepers with impartial judgement. The people of the Core Worlds, meanwhile, greatly trusted the Jedi due to how closely they worked with the Republic.
When the Trade Federation blocked and invaded Naboo instead of waiting for the Republic to take action, the Naboo and Gungans ultimately liberated themselves from the Federation's control in the Battle of Naboo. Chancellor Finis Valorum was voted out as Chancellor through a vote of no confidence following the Battle of Naboo. This vote of no confidence came at the request of the then Queen of Naboo, now Senator Padmé Amidala, which led to Sheev Palpatine becoming Chancellor.
Afterward, it seemed as though the Naboo Crisis would be nothing more than a catalyst for senatorial debates, but it truly showcased the Republic's great weaknesses—the massive bureaucracy, its weak central powerbase, and the lack of a military force—and brought Palpatine to the front as a political reformist.
Although Palpatine was able to vilify corporate powers and initially made moves to weaken the Federation as chancellor, the ineffective Senate let the Trade Federation continue its operations, ensuring it remained a powerful force in the Senate. The galaxy at large returned to the political squabbles that gave rise to the Confederacy of Independent Systems, with concerns about the Republic's effectiveness even beginning to arise in some corners of the Senate itself. Their rise had brought a crisis across the galaxy that had become known as the Separatist Crisis.
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