Limited Government

Limited government is defined as a political structure where laws limit the powers of the government to avoid abuse. Democracy is a significant example of a limited government where the power is distributed across the cabinet. It also restricts a single person from wielding excessive influence in decision-making. 

The motive behind limiting the power according to limited government principle is to ensure lawmakers themselves abide by the law. The philosophy aims to attain the welfare of all sections of society. Moreover, it is also to ensure that the citizens are charged the bare minimum of taxes that suffices the basic functioning of the government.

• Limited government refers to the process where certain directives limit the power and authority of the governing leaders. It also aims to ensure individual human rights such as freedom of speech or religious worship.
• Democracy that adheres to a written constitution in most cases, is a prominent example of a structure that limits the powers of a government.  The consensus of the majority of citizens along with the opposition limits the ruling party. In extreme cases, the ruling government can also be overthrown by holding a no-confidence motion. 
• The role of the government is designed to focus on areas like social welfare, defense and security.

Limited government is defined as an ideology that restricts allowing absolute powers to a government so that the lawmakers also abide by the laws. In a democracy, political leaders, lawmakers, judicial bodies, administrative forces, and citizens are all required to adhere to the directives of the constitution. 

The constitution is designed to serve justice to all and treat everyone as equal. An absence of a sense of justice and unchecked powers of the government could lead to a totalitarian regime where an authoritative leader stands above all. In a democracy, the judicial body upholds the constitution's values and keeps an eye on governmental activities.

The limited government power gives right to citizens to question authority without any fear. Impersonal third parties like a vigilance chief within a regulatory body allow an objective course of action for public welfare. Businesses flourish in environments where there is less interference from the government. 

Therefore, there is often liberty of commerce, profit-making, and business expansion in a constitutional government setup. However, businesses are obligated to act within the boundaries of the law. As such, the constitution is the key to achieving an efficient limited government structure.

Let us understand the characteristics or features in accordance with a limited government principle through the discussion below.

• Even though the powers of the leaders in a democratic government is limited, they do have a lot of responsibilities. For example, government leaders curate and implement strategies for social welfare, national security, international relations, health, and infrastructure. 
• The government is designed to focus on the preservation of fundamental human rights, equality before the law and the enforcement of justice. The government itself operates under certain rules and boundaries set by the constitution of the country.
• Certain constitutional rules are aimed at protecting citizens from government authorities. For example, in the US, the government is restricted from undertaking unreasonable search and seizure of personal property. It emphasizes the importance of having an authentic search warrant issued by a judge, based on a possible cause.
• Constitution itself is amended from time to time to keep up with the changing times.
• The power is restricted through decentralization. It is the concept of taking different types of power and assigning it to different people within the government. For example, most democratic governments have three important branches, namely, the legislative, the executive, and the judiciary. 
• Democracy stresses a lot of importance on consensus. In addition, the constitution lays down specific guidelines to protect the minority. 

Let us take a few real-life examples of a limited government power and understand the concept in depth.

The US government is a prominent example of a limited government. The US constitution limits the power of the federal government. Countries like America, Australia, Japan, and India follow a similar structure of governance.

While allowing enough liberty to citizens, democracies also try to grant freedom of commerce. Free capitalist economies and mixed economies try to keep negligible to limited interference towards the commerce sector. Liberalization of commerce propagates this idea whereby governments focus on removing restrictions to free trade. 

An example of this is lowering export or import tariffs and taxes. It encourages international companies in investing around the globe. Another example is monetary policies. In democracies, the central government usually formulates and implements monetary policies. 

The central bank is considered an impersonal body, away from the political influence. Therefore, it is entrusted with the decisions around the money supply, which is one of the most crucial tools to attain economic stability. 

Constitutional government celebrates the freedom of citizens and highlights individual rights. It stresses the power of consensus so that the views of every section of society are heard. The constitutional directives eliminate the risk of dictatorship. It prevents the forces in power from favoring one school of thought and overlooking the others.

The limited government principle keeps the government accountable to the people. Even those in positions of power are ruled by the limitations set by the legal infrastructure. From the business perspective, it hinders the government from favoring particular traders, trade policies, and practices. Each policy must go through the scanner of the opposing views. Lawmakers try to consider the grievances of all the parties involved to come up with balanced laws. 

It prevents lawmakers from making too many drastic changes to the trading policies. As a result, market competition is maintained. Competition leads to newer products, better services, and better costs for consumers to enjoy.  As per a 2019 report, it was found that countries that had switched to democracy witnessed a 20 % increase in GDP as compared to if they had remained authoritarian. An economist from MIT co-authored the report.

This has been a guide to what is Limited Government & its definition. We explain how limited government works with examples, characteristics, and importance. You can learn more about accounting from the following articles –

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