This is NOT a post about introducing new mechanics ( like espionage) or radically redesigning the system, or listing bugs the devs already know about, but rather to inject some common sense into the process (and close some exploits) using existing game structure.
Why Fix Diplomacy?
3 reasons:
1) Draginol's first post in the Wish List thread on Steam from 9 months ago, listing "major diplomacy updates". While it's been tweaked in the right direction, it still needs this 'major update'.
2) There's a lot of exploits in its current form, and depending on which players you ask, it is too harsh and warlike, or too easy to get diplomatic victories. This makes for a less enjoyable game experience at both ends of the spectrum.
3) Diplomacy affects every player, at every level, in every game. Even if not using it as a victory strategy in itself, it is still an aspect of the game that every player uses to some degree.
Overall Changes
1) Widen the Diplomatic number scale from its current +/-10 to something like +/-50. Getting into many unwanted wars or getting alliance victories both happen too quickly. Newer players won't get inundated by multiple wars early on and will have time to decide how/if they want to change that course. All players will have more time to decide how they want their games to play out. Those that choose to research diplomacy techs and buildings can go that route. Those that want to build ships instead can do that too. It's about giving players choices they don't have now. (where it's pretty much invest in diplomacy early or get ganged up on early because you didn't)
2) Exploration Treaties should NOT give automatic contact with undiscovered races. This is an exploit in speed alliance victories.
3) Give players the same 'remove your starbase' option the Ai gets now. Implement it the same as the 'remove your ships' request that exists now with refusal, penalties, etc.
4) Paying people to declare war (player or Ai) needs an overhaul. The Ai offers 10% of its treasury or 1 tech to the human, but demands 3000 credits value of stuff in trade when players ask them. That's not fair or balanced. The Ai should be able to offer anything that the human player can, in combination. If empire A wants to pay empire B to go to war with empire C, base costs (3000 cred or whatever) should be affected by the following:
i) Diplomatic relations between A and B, and between B and C
ii) Personality traits and behaviour preferences of B and C
iii) Military power of B vs C
5) When asking for peace, the Ai can ask at no cost, but the human player has to pay through the nose (usually). This is not fair or balanced. Peace talks should work the same both ways, factoring in all the trade changes mentioned in the rest of this post.
6) Trade resource value should be affected by the personality traits and civilization preferences. Synthetic races should value trade resources that give + to growth or food a value of 0, since they aren't affected by those metrics.
7) Prices for mineable resources should scale based on how many the Ai currently has, and if the Ai weapons tech corresponds to that resource. I'd suggest 5 as a cutoff number before the scaling starts, because all resources can be used planetarily, but the dropoff after should be fairly steep. This cuts down on the fleecing of Ai for tech and cash. Some tweaking may need to happen to get the Ai to build Elerium Shields, but they seem to do ok building the other resource buildings and ships with proto weapons.
8) Synthetic races should assign a value of 0 to all tech relating to growth or food, since they aren't affected by those metrics.
9) Tech trading value should be modified by a race's personality traits and civilization preferences. For example, the Drengin have a high value on military, but low on culture, so they should be willing to pay more for military tech and less for culture tech. Conversely, they will assign a higher value on military tech, since they will not want to trade away their advantages easily.
10) Tech trading value should be modified by the diplomatic relations and ideological differences between the 2 parties. (if it's not already, not sure about that, besides the military tech changes made in 1.6). For example, if you are a Malevolent empire asking a Benevolent one for weapons tech, that should cost more. If the other empire hates you, they're going to charge you more for everything. I realize ideology factors into diplomatic relations, but it should have its own modifier aside from that as well.
11) The diplomatic bonus for structures such as embassies and diplomatic starbase outposts should be cut in half. It's too easy to spam these and make everyone like you early on. Good relations, like bad ones, should develop over time, not 10 turns.
12) Treaties and alliances should work the same as 'Alliance' does now. You need a certain level of diplomatic relations to offer it. I'd add that there should be a minimum time spent at that level, or better before it can be offered. Clarify what the effects of those are in game. Make the Ai actually research them more, and offer them in game. In over 1000 of play, I've *never* had an Ai offer me any kind of treaty or alliance beyond non-aggression pacts.
13) Trade Embargo should be used by the Ai. Trade is important for wealth for everyone, and embargoes would be an important tool in hampering an empire's finances. It's price should be determined by all the same variables as in #4 above. For example, Entrepreneur races should charge huge amounts for that, since it nullifies one of their best advantages.
14) Have the Ai put more priority on forming alliances. Since the Ai has little ability to grow it's empire in any meaningful way, by end game it's just a domino effect for the human player to mop up a bunch of tiny (by comparison) empires. Now, on the other hand, if they allied for survival.... 
