I suppose this question is at the heart of Social Contract à la Jean-Jacques Rousseau, John Locke and Thomas Hobbes. The people agree to surrender some their freedom and rights to the ruler, in exchange for a host of protections of their broader freedom and rights from said ruler and the governing body. I'd say it's a complex balance, and how this balance is reached and maintained very much depends on the relationship between the government and the people: Is it trusting and respectful, or otherwise?
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