Whilst the ADN emerged as the largest party in Congress, it failed to win a majority of seats, and formed a coalition government with the Revolutionary Left Movement, Conscience of Fatherland and the Solidarity Civic Unity.

[3] Incumbent president Gonzalo Sánchez de Lozada chose René Blattmann, minister of justice and human rights, as the MNR's presidential candidate.

Blattmann's reformations to the judicial system had gained him great popularity among the population with him holding a 34% electoral preference to Hugo Banzer's 14% upon the announcement of his candidacy in December 1996.

[5] Economic and social issues dominated the campaign, with all major parties promising to continue the free market policies implemented by outgoing President Gonzalo Sánchez de Lozada.

Whilst Juan Carlos Durán emphasised the free market reforms, Hugo Banzer promised to improve the lives of the indigenous population.