So I've been brainstorming policy options again, particularly the Dominance/Progress/Wealth trio.
I really like the way you set up Progress, as I've mentioned before. The bonuses feel worth taking and the shortcoming, whether you or the AI take it, has a big effect on gameplay. It also is a great foil to Fundamentalism, with both having some nice culture bonuses. In my most recent game, I was easily able to convince Lord's Believers to declare war on the University, which feels very satisfying. It was also great to see Miriam ranking low on the literacy and total techs, despite her tendency to settle cities like mad.
On to Dominance. Given the various worker speed bonuses one can get from quests and techs, their penalty doesn't seem like much of a big deal. An interesting way to "punish" Dominance players would be to give them a growth or food penalty when not building military units.
This plays to the inherent Social Darwinism of a system based upon the rule of the strong as opposed to the wise or the wealthy. I envision children being raised from a young age to become soldiers, while those who are not fit for military duty are removed from the society, ergo taking longer to increase population when not focusing on training units. Of course, this would require quite a bit of coding to bring into function, so I understand if you prefer to keep the shortcoming you have as is.
I'll leave you with an easier to code idea. Wealth's shortcoming should check when other players complete a Wonder, but rather than giving a bonus like the Cooperation virtue, it should give some negative modifier instead. Societies based solely around material goods and possessions pride themselves on their expensive Wonders, and learning than someone else built this great thing and that now you can't have one would drive them nuts.