The correct statement is "2 only".

A constitutional government is a system of governance where there are limits to the power of the government, and these limits are laid down in a constitution. The constitution defines the powers and functions of the government, as well as the rights and freedoms of individuals.

Statement 1 is incorrect as a constitutional government does not restrict individual liberties in the interest of state authority. In fact, the purpose of a constitution is to protect individual rights and freedoms from excessive government interference.

Statement 2 is correct as a constitutional government places effective restrictions on the authority of the state in the interest of individual liberty. The constitution outlines the limits of government power, which includes protecting the rights and freedoms of individuals from arbitrary action by the state.