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: 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.
Politics
Frontier
No advantages or disadvantages. While it is balanced, it lacks focus. Yang will want to switch to Police State as soon as possible because it will grant him great advantages with the only penalty being the upheaval cost, due to his immunity to inefficiency.
Police State
+2 Support, +2 Police, -2 Efficiency (except Yang)
Yang's best option because he incurs no penalty from it, and he starts with the option to boot. Everybody else is likely to suffer great inefficiency, so for them, Police State must either be balanced with other Social Engineering choices with positive Efficiency modifiers (e.g., Green) or with being a faction with bonus efficiency (e.g., Dierdre).
Democratic
+2 Efficiency, +2 Growth, -2 Support
Not a good idea for militaristic players, but great for pacifists. The extra efficiency will strengthen the economy, while the growth will help the faction expand, both horizontally and vertically.
Fundamentalist
+2 Probe, +1 Morale, -2 Research
When a faction switches to Fundamentalist, they mean business! This choice was designed for one thing: kicking butt. Your research will be crippled, so forget about it unless you can balance it (with Knowledge or your faction's traits), or you wish to start the war to end all wars.
Economics
Simple
No advantages or disadvantages. While it is balanced, it lacks focus. Yang will want to switch to Planned as soon as possibile because it will grant him advantages with the only penalty being the upheaval cost, due to his immunity to inefficiency.
Free Market
+2 Economy, -3 Planet, -5 Police
This is only good for one thing: bringing in lots of money. This is best if your faction already has an economy bonus; it will help the benefits balance against what you lose: control of both your people and Planet. Forget about balancing out the -5 Police; reversing or minimizing the -3 Planet is doable. The penalty isn't too bad if you know what you're doing. It is if you don't.
Planned
+2 Growth, +1 Industry, -2 Efficiency (except Yang)
Again, 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're 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.
Green
+2 Efficiency, +2 Planet, -2 Growth
Best if you wish to fight with Mind Worms — both in the sense of fighting against them and fighting using them. Otherwise, the +2 Efficiency is often not worth the -2 Growth.
Values
Survival
No advantages or disadvantages. All other Values will hurt you militarily in some way or other, but Power will more than counterbalance that. The others will not, therefore, choosing a Value can be the most determining factor in whether or not you will play a military-focused middlegame.
Power
+2 Support, +2 Morale, -2 Industry
Another choice that warmongers will want, although the -2 Industry can also hurt their cause. There is no reason to choose Power unless you wish to use your military might extensively.
Knowledge
+2 Research, +1 Efficiency, -2 Probe
This choice is good either for boosting your Research through the roof or making Fundamentalist more practical.
Wealth
+1 Economy, +1 Industry, -2 Morale
As the name implies, this is for the money-grubber.
Future Tech
None
No advantages or disadvantages. As with Values, all other options will hurt you militarily, but Thought Control will counterbalance it by far if you have enough positive modifiers to Support elsewhere. Future Tech is geared towards helping you bring the game toward the end, and selecting one will likely be the final Social Engineering choice you make.
Cybernetic
+2 Efficiency, +2 Planet, +2 Research, -3 Police
Mind Worm lovers will love this.
Eudaimonic
+2 Economy, +2 Growth, +2 Industry, -2 Morale
Thought Control
+2 Morale, +2 Probe, +2 Police, -3 Support
An all-military option, despite the -3 Support.