• The Government consists of a Head of Government and four Councillors who are recommended by the Parliament and appointed by the Prince.
• The Parliament which has a monopoly on the legislative function, consists of twenty-five members elected every four years by universal suffrage and secret ballot in direct elections under the proportional representation system. Apart from universal suffrage, it is the right of the people to initiate constitutional changes as well as to have certain important constitutional amendments effecting the rights of the people approved by referendum.
• The judicial function is carried out through a system of independent courts. Courts of the first, second, and final instance exercise jurisdiction in civil and criminal actions. Appeals against decisions and administrative orders are decided by the Administrative Appeals Court. Constitutional control (guarantee of constitutional rights, constitutional control over laws and regulations) and decisions of a legal-political nature are the responsibility of the Constitutional Court (Staatsgerichtshof).

Unlike some contemporary monarchies in which the participation of the monarch is largely restricted to representative functions, the Prince of Liechtenstein takes an active role in the functioning of the state. He is constitutionally empowered to represent the State and act on its behalf. The Prince appoints the State?s functionaries. Laws passed by the Parliament come into effect only upon his approval. The Prince may summon, close or dissolve Parliament and has the powers of pardon and dispensation.

In 1924 Liechtenstein entered into a customs and economic union with Switzerland. The Swiss franc is the official currency. As a result of close economic cooperation with Switzerland and due to the very stable internal political structure, Liechtenstein has developed in fifty years from a purely agrarian country to a highly industrialized state boasting a high standard of living. The financial services sector has gained increasing importance along with industry.

Liechtenstein is a member of the European Free Trade Association (EFTA) and a member of the European Economic Area (EEA) since 1995. Significant for its foreign policy is its membership in the United Nations, the Organisation for Security and Cooperation in Europe (OSZE) as well as the European Council.