Social Engineering is equivalent to what the Civilization games refer to as form of government. However, Alpha Centauri's system is the most flexible of any Civ game (until Civilization IV): you can not only choose the form of government, but fine-tune its economy, values, and how it embraces advanced technology.
In Civ games, it is usually the rule that you must switch out of your starting form of government as soon as you can get any other form. This is not always true in this game. It is surely important to adjust your Social Engineering choices, but the time must be ripe. Would you want to switch to a Police State if you're already inefficient? No! You should only use Police State if your empire is reasonably efficient and will remain so.
More details on the effects of Social Engineering here. Keep in mind that some of the negative impacts can be counteracted by Secret Protects or buildings like the Children's Crèche.
Your Social Engineering choices affect the AI factions' attitudes toward you. Each faction has a "preferred" choice, which its AI will tend to choose when available, and (with the exception of the Nautilus Pirates, who can use any choice), an "aversion" choice which is not available to the faction under any circumstances. For faction AIs, there are also some choices which they will tend not to use and will become hostile towards factions that use them. For example, Morgan will begin to like you if your economy is a Free Market (his preferred choice), and will hate you for running Planned (his aversion) or Green. Likewise, Deirdre will hate you for running Free Market (her aversion) or Planned, and love you if you're Green. (Again, the Nautilus Pirates are an exception here; they have no social engineering aversions, but Ulrik Svensgaard tends to mirror Santiago's views toward human players' social engineering models.) Listed under each socioeconomic model are the factions whose attitudes are affected if you are using that model.
A faction may not select its aversion as a current engineering choice, regardless of whether it is AI-controlled or human-controlled.
"Frontier politics represent the informal governing arrangements made in early colonies, before populations reach levels requiring more advanced forms of government. Frontier politics provides no bonuses or penalties."
This is the default setting at start. No advantages or disadvantages.
- Prerequisite: Doctrine: Loyalty
+2 Support, +2 Police, -2 Efficiency (except Yang)
"Police States use oppression and high security to keep their citizens in line, and allow their leaders great power over military decisions. But oppression of this type also decreases economic efficiency. "
This is Yang's best option because he incurs no penalty from it. He begins with the option to choose this.
Police State is a useful military choice early game for factions that can't support more than 2 units. The added Police stat also helps keep newly conquered bases from rioting, allowing you to continue to reinforce from the front lines with better effectiveness.
- Prerequisite: Ethical Calculus
+2 Efficiency, +2 Growth, -2 Support
"Democracies allow citizens to participate in government, and forgo oppression and the stability it confers in favor of growth and efficiency. But citizens remain suspicious of large military deployments, and civilian oversight creates large military bureaucracies, so military support costs increase. "
If you're a builder or scientist, then this is the best choice for you. Having Democracy and a Planned economy together will give you +4 growth. Any base that has a Children's Creche will have an additional +2 growth, for +6 Growth total, causing it to grow every turn as long as there are sufficient nutrients (similar to the Cloning Vats).
Later on in the game, the negative 2 support is meaningless once you start making units with Clean Reactors, as they require no support. In addition, in the latter part of the game you are unlikely to expand, so the "free 10 minerals on new base" advantage of a non-negative Support becomes moot as well.
- Prerequisite: Secrets of the Human Brain
+2 Probe, +1 Morale, -2 Research
"Fundamentalist politics unite a society behind a strong, dogmatic religion. Evangelizing the populace can create loyal, even fanatical military forces, and tends to immunize citizens against (other forms of) brainwashing, but technological research tends to suffer under the continual assaults on intellectual integrity associated with such regimes."
Unless you plan on using probe teams, there is no possible reason to choose this. With such a penalty to your research, others will tech up faster, and be able to easily overwhelm you.
"Simple Economics describes the informal, ad hoc economy which develops in the early years of planetfall, before more organized economic systems can be put in place. Simple Economics provides no special benefits or penalties."
Default setting at beginning. No advantages or disadvantages.
- Prerequisite: Industrial Economics
+2 Economy, -3 Planet, -5 Police
"Free Market economics turns market forces loose in your society. Unfettered market economics can produce great wealth quickly, but in the context of Planet’s fragile emerging economies can also lead to extremes of pollution and ecological damage. Also, citizens rendered suddenly poor by the actions unscrupulous moguls may revolt against their energy-fattened masters."
This is only good for one thing: bringing in lots of money (especially as Morgan with numerous treaties). Only Yang with a specific set of Secret Projects, buildings, and other Social Engineering choices can actually counter the -5 Police aspect of this. Meanwhile, reversing or minimizing the -3 Planet is doable by any faction. The penalty isn't too bad if you know what you're doing. It is if you don't.
The drone problem can be reduced (or even eliminated) by switching Psych to 10% or 20% in social engineering. Military deployment is out of the question with this economy due to pacifism, but due to your large bank balance, you can instead conduct warfare using probe teams to subvert enemy units and bases.
Advanced players may want to switch to Free Market as early as possible by researching Industrial Economics at the first opportunity. The base tile of each base is free from early game restrictions, and not much energy is being produced elsewhere because the focus is on creating Colony Pods, therefore the energy output of each base can often be doubled, or nearly so.
The Spartans are uniquely capable of lowering the drone penalty for free market before the advent of Thought Control. This is done by use of Police State and Ascetic Virtues. This yields a -1 police rating, allowing one police unit but no nerve stapling.
- Prerequisite: Planetary Networks
+2 Growth, +1 Industry, -2 Efficiency (except Yang)
"Either a semi-market economy kept in check by fierce governmental regulation, or a completely state controlled economy. Planned economics promotes stable industrial and population growth, but sacrifices efficiency."
Yang will usually want this because he suffers no disadvantages. Otherwise, the efficiency hit can be crippling. The combination of Police State with Planned is signing your faction's death certificate, unless you are Yang, in which case it's your most optimal combination. Otherwise, it is often good for a Democratic faction (in order to give a further boost to Growth), especially because the efficiency of Democratic will balance perfectly against the inefficiency of Planned and with Children's Creches your bases will enter pop boom. Useful in early game because you need to expand and build infrastructure.
- Prerequisite: Centauri Empathy
+2 Efficiency, +2 Planet, -2 Growth
"Green economics strives to integrate sentient progress with the needs of the biosphere. Green economies use resources efficiently and tend to avoid the excesses of industrial development which could provoke Planet’s native life, but population growth necessarily suffers for lack of space."
Best if you wish to fight or train Mind Worms; both in the sense of fighting against them and fighting using them. Initially, the +2 Efficiency seems to not be worth the -2 Growth, but the Growth penalty is easily negated by building a Children's Crèche, which gives the base in which it's built +2 Growth. Also, keep in mind that once you have many many bases, +2 efficiency will benefit your economy as much as Free Market's +2 economy without all the drawbacks --- high efficiency reduces unhappiness caused by bureaucracy (i.e. number of bases), letting you work more tiles, and reduces the distance-from-headquarters penalty to raw energy production.
Combined with Democracy, your faction may have +4 efficiency. With a paradigm economy, your faction can shift its social engineering to full economy or full research without suffering penalties, which allows great flexibility.
Default setting at start of a game. No advantages or disadvantages.
"Survival is of course the all-encompassing first priority of early human or Progenitor space colonies. Survival as a priority provides no special bonuses or penalties."
- Prerequisite: Advanced Military Algorithms
+2 Support, +2 Morale, -2 Industry
"Leaders seeking Power build strong, well-paid military forces to enforce their will. But Economic and industrial infrastructure may suffer from bloated “defense” budgets."
Rather helpful for those who wish a strong military to fight with, although the -2 Industry can hurt production of new units. There is no reason to choose Power unless you wish to use your military might extensively.
- Prerequisite: Cyberethics
+2 Research, +1 Efficiency, -2 Probe
"Leaders seeking Knowledge and intellectual enlightenment will pour resources into research and education. They will also tend to promote the free exchange of information, which increases efficiency but also carries greater security risks."
This choice is good for increasing your Research significantly. The increased vulnerability to enemy probe teams can be countered by various means. Extremely useful for globe-spanning empires searching for just that tiny bit more efficiency to stamp out their bureaucratic troubles once intermingled with Democratic politics, Green economics, and Cybernetic futurism.
- Prerequisite: Industrial Automation
+1 Economy, +1 Industry, -2 Morale
"Leaders seeking Wealth will concentrate on building economic and industrial infrastructure rapidly. They achieve rapid growth and development, with possible side effects being decadence and moral decay."
Especially useful for Morgan, as he can run Wealth instead of Free Market and get the much-desired +1 energy per square. If you are worried about ecological damage, build a lot of forests and Tree Farms.
Alternately, Morgan can use both Free Market and Wealth for a +4 Economy rating. This yields +1 energy per square, +2 energy per base square and +2 on the commerce multiplier. The arrangement is powerful for transcend economic victory strategies. It impairs conquest and defense by keeping the police penalty of Free Market and adding a morale penalty to Morgan's already harsh support value. This means the smaller forces he does possess will be weakened, especially against a mass attrition attack. If/when he gets a hold of the Cloning Vats, Ascetic Virtues, and the concept of Thought Controlled societies though, things begin to become equalized a bit on combat terms.
A stronger economy means more energy credits to use for research, allowing you to advance in technology faster, and thus be stronger military wise than others.
This is the Spartans' aversion.
Future Society options come later on in the game.
"None, or no Future Society, simply means that your society has not yet evolved to a far future society. No bonuses or penalties apply."
The default setting. No advantages or disadvantages.
- Prerequisite: Digital Sentience
+2 Efficiency, +2 Planet, +2 Research, -3 Police
"In the far future, citizens may turn many of the tasks of governing society over to artificially intelligent computers, increasing efficiency and freeing individuals for more creative tasks. But will workers displaced by computers sink into despair, poverty, and possible unrest?"
A good all-round choice. By the end game, you should have enough specialists, base facilities and/or secret projects to make drone riots a thing of the past. The Efficiency will greatly help large empires (the bonus continues to stack even after +4 efficiency); the Planet modifier will help keep your futuristic empire from being destroyed by rampaging swarms of mind worms and the Research bonus will help you tech up faster.
This is the preferred choice of the Cybernetic Consciousness, who are also immune to the Police penalty. No faction is completely adverse to this Future Society concept, leading to a slight bias against adopters from ALL other factions. The -3 Police is eliminated by whoever first completes the Secret Project Network Backbone.
- Prerequisite: Eudaimonia
+2 Economy, +2 Growth, +2 Industry, -2 Morale
"Perhaps the most pleasant to contemplate living in, this far future society takes its name from an ancient Greek word for fulfillment and happiness. Eudaimonic society encourages each citizen to achieve happiness through striving to fulfill completely his or her potential. Population, Economy, and Industry all experience healthy growth. Violence fades as society grows more tolerant and just, and even when this society’s hand is forced it often shoots to subdue rather than to destroy."
A massive boost to infrastructure for the endgame.
Combined with Democracy and Planned, all of your bases will enter population boom, even without a Children's Creche, allowing any newly created bases to quickly catch up with the others.
The Economy bonus, combined with other economy bonuses, makes it possible to reach +2 energy per square.
This is the Free Drones' preferred choice, and no other faction opposes this.
- Prerequisite: The Will to Power
+2 Morale, +2 Probe, +2 Police, -3 Support
"The ultimate in “Big Brother” methods, Thought Control effuses subtle neurochemical triggers into the atmosphere to render its population obedient, loyal, and resistant to outside ideas. But significant resources are required to maintain this level of control."
The first to complete the Secret Project Cloning Vats will no longer have the -3 Support penalty.
No faction either opposes or supports Thought Control, leading to a slight bias against the factions who adopt this from ALL other factions.
At this stage of the game, you should have Clean Reactors, which will make the negative in support not matter.