LIMITED GOVERNMENT: Definition, Examples, and How It Works


The concept of limited government is something that many people support, even though Americans may be hopelessly divided on almost every issue. But what is limited government, what is its example, and why is it a key component of the American political system?

What is Limited Government?

A limited government is one in which the use of legalized force is limited by delegated and enumerated powers. Countries with small governments have fewer laws governing what individuals and businesses can and cannot do. The powers and limitations of government power are spelled out in many countries’ written constitutions.

A government that is interventionist or authoritarian is the polar opposite of a limited government. In reality, most countries, even those with otherwise high levels of freedom and liberty, have some government control and intervention.

Understanding a Limited Government

The theory of limited government can be traced back to seventeenth-century Enlightenment philosophers, although politicians and economists disagree on the precise limitations that a government should have.

A limited government, in its most basic form, is one whose primary function is to protect people and their property, and it levies only enough taxes to pay for services related to these goals. According to this interpretation, a limited government might tax the population to pay for police or national defense, but it would not concern itself with the beliefs or moral behavior of its citizens.

Another interpretation defines a limited government as one that exercises only the specifically named powers that its constitution assigns to it. It is also distinguished by a division of powers and a system of checks and balances. For example, the United States government is prohibited from exercising the specific powers that the constitution grants it.

History of Limited Governments

The classical liberal tradition in Europe is where limited government, in its modern form, first emerged. In contrast to the monarchies and theocratic governments that dominated Europe at the time, this tradition emphasized individual rights.

One of the earliest written descriptions of a limited government is the Magna Carta, drafted in 1215. By granting the country’s nobility rights over the throne, the document limited the reach of the English king’s power. The document, however, only protected a small portion of what is now the United Kingdom.

By separating the powers of the state and federal governments, the United States Constitution drafted in 1787, expanded on the concept of limited government. The federal government was also divided into three branches: the legislative, judicial, and executive. This is done to make it difficult for any single person or interest group to wield all of the power of the government.

Furthermore, the Bill of Rights—the first ten amendments to the U.S. Certain prohibitions that apply to the government are listed in the 1791 Constitution, which was ratified. By forbidding certain uses of government power, these rights further limit the federal government.

Characteristics of Limited Government

Let us examine the characteristics or features of the principle of limited government in the discussion below.

  • Even though a democratic government’s leaders have limited powers, they also have a lot of responsibilities. Government leaders, for example, curate and implement social welfare, national security, international relations, health, and infrastructure strategies.
  • The government is intended to be concerned with the protection of fundamental human rights, equality before the law, and the administration of justice. According to the country’s constitution, the government operates within certain parameters.
  • Certain constitutional provisions protect citizens from governmental authorities. For example, the government is prohibited from conducting unreasonable searches and seizures of personal property in the United States. It emphasizes the significance of having a genuine search warrant issued by a judge based on probable cause.
  • The Constitution is amended regularly to keep up with changing times.
  • Decentralization limits to power. It is the concept of taking various types of energy and delegating it to multiple individuals within the government. For example, most democratic governments have three legislative, executive, and judicial branches.
  • Democracy emphasizes the significance of consensus. Furthermore, the constitution establishes specific guidelines to protect minorities.

The Economy and Limited Governments

Limited governments seek minimal interventions in trade or commercial activity when formulating economic policy. They are frequently associated with ideas such as laissez-faire economics, first articulated in Adam Smith’s 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations. The most extreme form of limited government would be one in which supply and demand drive the economy: the government would not intervene to set prices or influence business activity.

This viewpoint’s proponents contend that by minimizing restrictions on commercial activity, the limited government can promote economic growth and prosperity. This school of thought, which later became associated with the Austrian school of economics, holds that government interventions in the economy can distort markets and reduce competition, resulting in shortages or high prices.

Critics of this viewpoint believe that the government must intervene in the economy, either to support particular industries or to reduce wealth inequality. John Maynard Keynes, who argued that government spending can stimulate economic activity, is often cited as the originator of this viewpoint in modern economics.

Limited Government Problems

Many contemporary political thinkers agree that government powers should be limited, but considerable disagreement exists about the precise limits on government power. Many critics argue that government has the ability or responsibility to solve collective action problems that market forces alone cannot solve.

Environmental regulations that penalize businesses for polluting the air or water are a common example. Although individuals can sue polluting industries in court, this option is out of reach for many potential victims, particularly those who are excluded from the legal system. Instead, the Environmental Protection Agency is expected to penalize these industries on behalf of the general public.

Another issue is the defense of critical industries. Many governments use subsidies or tariffs to support domestic agriculture or manufacturing, even though prices on the global market would be lower.

Although protectionism can sometimes benefit political interests, it can also benefit industries with strategic or security value. According to this logic, the cost of supporting these industries is less than the cost of not having them, especially in the event of a major crisis like war or famine.

Comparing Small and Limited Government

A government can be too small as well. In common parlance, the terms “limited government” and “small government” are often used interchangeably, implying that governments should levy as few taxes as possible and employ as few administrators as possible. Although these concepts are intertwined, a small government may lack the resources to protect public interests.

For example, consider a hypothetical country where taxes are insufficient to pay administrators a competitive salary. To make ends meet, some administrators may resort to graft or bribery, imposing an even greater economic burden than taxation.

World Bank research confirms that public-sector salaries play a significant role in anti-corruption measures. Based on country data, the Bank concluded that increasing wages, when combined with appropriate policies, could reduce corruption in certain situations.

Example of Limited Government

Let’s examine a real-world example of limited government power so that we can fully grasp the concept. An excellent example of a limited government is the US government. The power of the federal government is constrained by the US constitution. Countries like America, Australia, Japan, and India have similar governance structures.

Democracies strive to provide citizens with sufficient liberty while also allowing for free trade. Free capitalist and mixed economies strive to keep government interference in the commercial sector to a minimum. Commerce liberalization spreads this idea, with governments focusing on removing trade barriers.

Lowering export or import tariffs and taxes is one example. It encourages international companies to invest globally. Monetary policies are another example. The central government typically formulates and implements monetary policies in democracies.

The central bank is regarded as an impersonal institution free of political influence. As a result, it is entrusted with making decisions about the money supply, which is one of the most essential tools for achieving economic stability.

Importance of Limited Government

The constitutional government emphasizes individual rights and celebrates citizen freedom. It emphasizes the importance of consensus in ensuring that the views of all segments of society are heard. The constitutional provisions eliminate the possibility of dictatorship. It prevents powerful forces from favoring one school of thought over others.

The principle of limited government holds the government responsible to the people. Even those in positions of power are constrained by the legal infrastructure. It prevents the government from favoring specific traders, trade policies, and practices from a business perspective. Each policy must be scrutinized in light of competing viewpoints. To create balanced laws, legislators try to consider the grievances of all parties involved.

It prevents legislators from making too many drastic changes to trade policies. As a result, market competition is maintained. Competition results in newer products, better services, and lower prices for consumers to enjoy. According to a 2019 report, countries that switched to democracy saw a 20% increase in GDP compared to countries that remained authoritarian. The report was co-authored by an MIT economist.


Limited Government And Constitutionality

Both the French Constitution of 1793 and the US Constitution of 1789 support the idea of limited government. Through a division of powers between different branches of government, the US Constitution upholds the principles of limited government.

These branches are legislative, executive, and judicial. The powers of the federal government and those of the state governments are also distinguished.

#1. Constitution of the United States

The great security against a gradual concentration of the several powers in the same department consists in giving to those who administer each department the necessary constitutional means, and personal motives, to resist encroachments of the others, wrote James Madison in Federalist No. 51. (Madison, 1788).

#2. French Constitution

The French constitution was founded on the principle that rational democratic self-government was the best way to achieve limited government. A tyrannical rule was viewed as incompatible with the protection and enforcement of the general will (Rosenfeld, 1994, p. 11).

What is the limited meaning of the government?

According to the concept of limited government, there should be legal limitations on the power of political authorities, particularly in terms of individual rights.

What government is not all-powerful?

The government is not all-powerful, and it can only do what the people have given it the authority to do. The government and those who govern, as well as those who are governed, are bound by the law.

What is the concept of government?

A government is a system of order for a country, state, or other political units. The rules of society, defense, foreign policy, the economy, and public services must be established and enforced by a government.

What is a government summary?

A government is an institution charged with creating and enforcing a society’s rules, as well as regulating relationships with other societies.

Popular sovereignty, also known as squatter sovereignty, was a contentious political doctrine in American history that held that the people of federal territories should be able to decide whether their environments would join the Union as free or slave states.

What is meant by the term “republicanism”?

Republicanism is the political conviction that the best form of government is one in which citizens elect their representatives and leaders.


According to the concept of limited government, there should be legal limitations on the power of political authorities, particularly regarding individual rights. In economic affairs, where government intervention may disrupt markets and commerce, the concept is also important.


Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like