I like this, as it does have potential.
Say for example, different government positions make different governments more favored. Instead of having a random favored government, you have your government positions. Every government position has two effects:
1) The choice has some effect on the nation. It may be increased military, decrease bills, increase income, there's all sorts of things that can be affected by individual choices. If you're worried about inflation, which is a very serious concern which should be acknowledged, make all decisions have an equal penalty to go along with it.
That isn't to say "Give military benefits and econ penalty and econ benefits a military penalty" which so many people like to throw out in balance discussions. While economy may not rely on military, military does rely heavily on economy. You can make the decisions balanced in effect but still meaningful.
For example, reducing happiness in exchange for lowing infra upkeep, we're all used to it being a non-issue because the only time the trade off comes up is labor camps, but if it came up in something that can't just be swapped out easily (yes Government positions can currently be swapped out daily, and that would need to change. But in general more things need to be changed into "You must collect before you can change this" anyway. Though the suggestion above of a time delay based on your government type is very good too. Though rather than waiting 7 days from your last change, I would instead make it X days from the time you select change. So if you choose to change to a position in a Democracy it might take effect 7 days later, while a change in a Monarchy might take effect the following day) it's a very real decision which can depend sharply on other factors. Or %income bonuses vs pop bonuses vs flat happiness/income bonuses. Same thing with military, you might pick up soldier efficiency at the cost of plane efficiency, increase your max planes but decrease your nuclear capacity, etc.
2) Each choice has association with one or more government types, and possibly a negative effect on others. (So some choices may make your nation lean more towards democracy, and anti-Monarchy for example).
The point totals determine what government your people really want. Going with a government that you have more positions associated with gives synergy bonuses so to say. Whereas going with one your people are against may give no bonus at all, and you may have high chance of bad events occuring, possibly leading up to if you ignore it long enough the government switching to Revolutionary/Anarchy, and causing some rather nasty penalties. I'm thinking that what your people are against would be determined by how many points it is from your number 1 government option. Of course there's the middle ground, you don't necessarily have to go with the government you have the closest association to, but if you have 2-3 that are close, you can choose one of them. But if you have 1 this is at say 10 points, 2 at 8 points and another at 3, and choose the one at 3, you might start to see some disgruntlement in the form of the bad events popping up here and there, not to mention a lower overall government bonus. If you have another one in the negative point range, it could be that swapping causes penalties rather than bonuses immediately.
The synergy bonuses can be a good way to balance out the overall positions. Positions may seem stronger individually but when getting them altogether, and going with the associated government, it may end up less than having the less beneficial positions, but a government with a stronger synergy. There's tons of room for customization here. Wonders/Improvements specific to government types, both to disincentivize switching, and also to give more variety in nation types. More militaristic governments might see new unique weapons systems come their way, or a peaceful government might find new defensive advantages that other nations hadnt developed due to focusing outward rather than inward. I figure by the time a nation is developing wonders it should be developed enough to be sure in its government and no longer be fluctuating radically. If a nation wishes to change government, any wonders or improvements from their previous government are automatically destroyed. (An anarchy caused by war being the exception to this rule)
Realistically if done right something like this could supplement the trade system, giving a degree of customization that we really can't even hope for under the current system. It would be a long process to balance properly though, and as such we wouldn't see anything as radical as I have suggested get added.
Fake Edit: After typing all that I read a link provided above. Much of what was in that link corresponds with what I am saying. However a post from that link caught my eye. Lucas Perry said:
QUOTE
Make the government more RPish.
Have it to where when you answer questions a certain way, your government will automatically change to the result of your answers. Than say a month later you can answer those questions again to keep it up to date.
This idea is good.
I actually kind of like this idea as opposed to my side note above about the time to change government. Once every month you are presented with your government options as they presently are, and are given the choice to alter them. Events may also give the opportunity to alter your options outside of this timeline. This prevents swapping out your government positions in anticipation of a war (unless you're going to have a one month advance), and stops any back collecting schemes to maximize benefits from this in its tracks. All while opening up the customization.