Checks and Balances: Definition, Examples, and How They Work

What Are Checks and Balances?

Checks and balances are various procedures set in place to reduce mistakes, prevent improper behavior, or decrease the risk of centralization of power. Checks and balances usually ensure that no one person or department has absolute control over decisions, clearly define the assigned duties, and force cooperation in completing tasks.

The term is most commonly used in the context of government but also refers to limiting power in businesses and organizations.

Key Takeaways

  • Checks and balances refer to the separation of power to avoid one entity or body wielding too much power.
  • Checks and balances can help reduce mistakes and prevent improper behavior in organizations.
  • Checks and balances are most commonly used in the context of government, for example in the U.S. government through the establishment of the executive branch, the legislative branch, and the judicial branch.
  • Checks and balances are important in businesses and other organizations where one individual can make decisions that affect operations, such as the CEO or a majority shareholder.
  • The idea of checks and balances dates back as far as the Roman empire.

How Checks and Balances Work

The U.S. government exercises checks and balances through its three branches: the legislative, executive, and judicial branches. It operates as a constitutionally limited government and is bound to the principles and actions that are authorized by the federal—and corresponding state—constitution.

Checks and balances are important in businesses and other organizations where one individual can make decisions that affect operations. Checks and balances can cost more money and decrease efficiency but can be critical in helping to identify internal and external theft.

By separating the duties of various employees into clearly defined roles, businesses and organizations are better able to ensure that rogue employees or executives cannot harm a business without the intervention of other employees. Having these types of internal controls in a business can help improve operational efficiency.

Internal control systems of publicly listed businesses in the U.S. use checks and balances. This is a requirement of the Sarbanes Oxley Act. The directors of such businesses have a legal obligation to ensure a proper system of internal control that includes checks and balances.

Checks and Balances in the World Economy

The United Nations has six internal institutions: the International Court of Justice, the General Assembly, the Economic and Social Council, the Trusteeship Council, the UN Secretariat, and the Security Council.

Each of these institutions has different responsibilities, such as maintaining international peace, policy review and recommendations on economic, social, and environmental issues, and an international court.

The individuals working in these bodies and the bodies themselves cannot influence each other. Given that the UN has a wide global influence, impacting most nations around the world, it's critical that different directives are handled by different groups so as to avoid a concentration of power.

The UN's voting system and veto power policy allow individual countries to check the power of other countries.

Example of Checks and Balances

The U.S. Constitution provides checks and balances for the U.S. government through the separation of powers between its three branches: the legislative branch, the executive branch, and the judicial branch. The Constitution gives specific abilities to each one of these three branches to ensure that no one section of the government could obtain excessive unchecked power.

Checks and balances are practiced by the U.S. government in the following ways. First, the legislative branch is the part of the government that makes laws, but the executive branch gives veto power to the president, allowing the president to keep the legislative branch in check.

In addition, the judicial branch, the part of the government that interprets the laws put into effect by the legislative branch, can deem certain laws unconstitutional making them void.

Moreover, while the president has veto power, the legislative branch can overturn a president's veto with a two-thirds "supermajority" vote by both houses of Congress. This ensures that the president cannot use his power for personal gain. The executive branch can also declare executive orders, effectively proclaiming how certain laws should be enforced, but the judicial branch can deem these orders to be unconstitutional.

Executive Orders

Executive orders are often declared for the benefit of the country and are rarely considered unconstitutional. They are enacted solely by the president as head of the executive branch of government.

Still, executive orders can be reversed by subsequent administrations. For example, when President Joe Biden first took office in January of 2021, he signed one of his first executive orders, #13986 entitled, Ensuring a Lawful and Accurate Enumeration and Apportionment Pursuant to the Decennial Census. This order effectively reversed policies set forth by a prior executive order enacted by President Donald Trump that would have excluded non-citizens from the U.S. Census count.

What Is the Definition of Checks and Balances in the U.S. Government?

In the U.S. government, checks and balances refers to the separation of power in the government, which is ensured through the establishment of three different branches: the executive branch, the judicial branch, and the legislative branch. All hold different powers and, therefore, can check the power of the other branches.

Who Created the Idea of Checks and Balances?

The idea of checks and balances, which is a separation of power, was first proposed by the Greek statesman, Polybius, in reference to the government of Ancient Rome. During the Age of Enlightenment, French philosopher, Baron de Montesquieu, discussed in his work, The Spirit of Laws, the need for the separation of powers to prevent despotism.

How Does the System of Checks and Balances Work in the World Economy?

Checks and balances in the world economy can be seen through the variety of global organizations that seek to check the power of different nations, organizations, and individuals. Groups such as NATO, the UN, the World Trade Organization (WTO), the International Criminal Court (ICC), all seek to check the power of other nations and institutions.

The Bottom Line

Without checks and balances, one branch of government can grow too powerful and problematic. In the U.S., three branches of the federal government effectively have a set of checks and balances: the legislative branch as Congress (the House of Representatives and the Senate), the Supreme Court as the judicial branch, and the Office of the President as the Executive Branch. Other world governments and international bodies like the United Nations also have checks and balances in place.

Article Sources
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  1. United Nations. "Main Bodies."

  2. Federal Register. "Ensuring a Lawful and Accurate Enumeration and Apportionment Pursuant to the Decennial Census."

  3. "Checks and Balances." Accessed Jan. 4, 2022.