This setting correspond to the "Lucky Nation" setting in the option screen of the new game menu. There are many more settings you can change here, rather than digging through the configuration file.
Available Options
Settings for Lucky Nations can be Historical, Random and None, giving rather strong bonuses to 8 selected AI nations, 8 random nation or no nations respectively.
The other settings that may interest you:
- Bonuses: Give various bonuses to the Player, to the AI or None
- AI Difficulty: Change how the AI react to the player's action. Easy are less harsh than with other AI, Hard is harsher than with other AI
What to do to reduce the difficulty?
If your aim is to reduce the game's difficulty, you should first disable lucky nations. Their bonuses will make them stronger fast, and the historical ones already have a good chance to snowball.
You should also reduce AI Difficulty, which will give you some more breathing space before the AI get angry with you. I do not know exactly how much, but if you play in a cutthroat region (HRE, for example), it can help you a lot.
Finally, activating Player Bonuses is the strongest of all. The bonuses will allow you to make a lot of mistakes before things start going bad, and will make you stronger than most comparable nations in the game.
What do they do exactly?
Player Bonuses:
- +50% Manpower
- -3 Unrest
- +50% Force limit (Land an naval)
- -33% Regiment and Ship costs
- -2% interests per annum
- +10% Improve Relations
- +2 Diplomatic Reputation
- +1 Diplomatic Relations
- +1 Advisor
- +1 Free Generals
- -25% Aggressive Expansion
- -0.05 War Exhaustion per Month
- -25% Coring Costs
Bonuses may or may not be different for the AI, but they seems similar.
Lucky Nations (AI Only):
First, lucky nations have +1 to each powers. Additionally:
- +1 Yearly Legitimacy
- -1 National Unrest
- +0.5 yearly republican tradition
- +1 Missionary Strength
- +1 Monthly Fervor
- +25% Church power
- -10% Stability cost
- +1 Possible Advisor
- -1 interest per annum
- +10% Global Trade Power
- +5% Spy Offense
- +5% Settler Chance
- +25% improve Relations
- -25% Aggressive Expansion
- +1 Land Leader Fire/Shock
- +10% Fort Defense
- +5% Siege Ability
- -25% Mercenary Cost
- +33% Manpower Recovery Speed
Historical Lucky Nations are (SourceSource, Archive):
- Castile (before year 1700 and Spain does not exist) / Spain (before year 1700 and Castile does not exist)
- Ottomans (before year 1700)
- Muscovy (if Russia does not exist) / Russia
- England (if Great Britain does not exist) / Great Britain
- France
- Austria
- Prussia (after year 1700)
- Netherlands (after becoming a nation)
- Portugal (before year 1700)
- Poland (if Commonwealth does not exist)
- Brandenburg (before year 1700)
- Sweden (before year 1700)
- Commonwealth (before year 1700)