These solutions seem to work for me.

1. Disable full screen-mode, but you are free to choose your full-screen resolution from the choices. Just disable the mode.

2. Run the game in "Win XP service pack 3" compatibility mode.

After I did all that, the game stopped freezing up every-time I change a policy or go a turn. I'm on Windows 8.

I certainly know how it is! The game will freeze up after meddling a few policies, and so on and forth. I was tired of having to restart my computer for the umpteen time. And yes, I believe there might be an error or so while adjusting the screen resolution issue, but you can just go back into the game and re-adjust to how you like it (IMO, it's better to handle the full screen mode adjustment first, before running it under Win XP compatibility). So, together with changing the windows compatibility, playing is now smooth with no more hang-ups (Whew!). I bought the game and it's expansions during the summer sale and only have gotten around to playing it now.

I also picked it up during the summer sale with the DLCs and it is one of my best purchases on GOG (among over a hundred games in four years time). Excellent game. I included it in my GOGmix 'Excellence in game design' and wish I could have been given more letters per game to describe it better. https://www.gog.com/mix/excellence_in_game_design