As minister of planning, Sánchez de Lozada employed "shock therapy" in 1985 to cut hyperinflation from an estimated 25,000% to a single digit within a period of less than six weeks.

[2][3] Victims' representatives have pursued compensatory damages for extrajudicial killings in a suit against him in the United States under the Alien Tort Statute.

The trial, which began on 5 March 2018 and concluded on 30 May 2018, found Sánchez de Lozada and his former defense minister Carlos Sanchez Berzaín not liable for the civilian deaths after the judge declared that there was "insufficient evidence".

On 5 April 2021, a separate U.S. District Court ruling reaffirmed a 2018 jury verdict which found both Sánchez de Lozada and Carlos Sanchez Berzaín liable and required them to pay $10 million.

The son of a political exile, university professor, and diplomat, Sánchez de Lozada spent his early years in the United States.

This transformed Bolivia from a semi-feudal oligarchy to a multi-party democracy by introducing universal suffrage, nationalizing the mines of the three Tin Barons, and carrying out sweeping agrarian reform.

Sánchez de Lozada oversaw a series of economic structural reforms that steered the country away from state capitalism, towards a mixed economy.

He is particularly known for having sharply reduced the hyperinflation of the period, using economic shock therapy along with then Finance Minister Juan L. Cariaga Osorio, as championed by United States economist Jeffrey Sachs, then of Harvard University.

Paz Zamora was backed in the runoff by the second-placed, former military dictator Hugo Banzer of the ADN, who had won 25.2% of the popular vote.

A coalition government that included the center-left Free Bolivia Movement (MBL) and populist Civic Solidarity Union (UCS) was formed.

[citation needed] Critics of the program have cited loss of national funds, skyrocketing prices for locals, and social unrest associated with such changes.

[7] As written by Jim Shultz for the North American Congress on Latin America, "The great sums promised from these sales of public assets seemed to barely trickle down into the pockets of the poor and flow freely into the coffers of the wealthy Bolivians who cut the deals—with major corruption scandals a regular fixture.

Sánchez de Lozada hired U.S. political consultants James Carville, Tad Devine, Stan Greenberg and Bob Shrum to advise his campaign.

[10] The people reacted in resentment, swelling the anti-U.S. vote for Evo Morales in the last three days of the campaign by 9 percent and helping him finish second after Sánchez de Lozada.

In January 2003 and under the leadership of Evo Morales, a group of union leaders (Evo Morales for the "cocaleros"—coca growers, Jaime Solares and Roberto de la Cruz for urban workers and miners, Felipe Quispe for the indigenous farmers in the Aymara region surrounding La Paz) joined together to found the "People's High Command" (Estado Mayor del pueblo).

By contrast, urban workers, primarily in La Paz, and miners protested against the possible proceeds of increasing natural gas production going to foreigners.

In late September, a convoy of buses and trucks under a police escort was bringing back to La Paz over 700 persons, including foreign tourists, after a 10-day blockade of a valley resort town.

A few days later, in early October, it was reported that Sánchez de Lozada had decided to export Bolivia's gas to Mexico and the United States through a Chilean port.

On 11 October, President Sánchez de Lozada promulgated Supreme Decree 27209, ordering the militarization of the gas plants and the transport of hydrocarbons.

[13] As a result, fully armed military troops were sent as a security force to open the way for diesel and gasoline cisterns to be transported through densely populated poor neighborhoods into La Paz.

Alteño residents reported that government troops started shooting indiscriminately, killing a five-year-old child and a pregnant mother.

Vice-President Mesa publicly broke with Sánchez de Lozada, saying, "Neither as a citizen nor as a man of principles can I accept that, faced with popular pressure, the response should be death."

In 2004, after a concerted campaign by the families of the victims, the government and human rights groups, who gathered over 700,000 signatures on petitions, two-thirds of Bolivia's Congress voted to authorize a "Trial of Responsibility" of the exiled president.

It was intended to determine whether Sánchez de Lozada and his cabinet ministers should be held legally responsible for the violence of the Gas War.

Supporters included many from the president's party, reflecting a broad consensus for an impartial investigation to understand the responsibilities for the violence and deaths.

In August 2011 the Bolivian Supreme Court sentenced five members of the military and two politicians to between three and fifteen years in prison for their role in the events of September and October 2003.

The request was rejected by the U.S. State Department in 2012, based on the argument that Sánchez de Lozada's actions are not a crime in the U.S., and that no dual criminality condition existed.

[21] On 3 August 2020, a three judge panel vacated the District Court's move to set aside the verdict, and ordered it to reconsider the matter on a new standard.

[22][23] On 5 April 2021, the 2018 jury verdict, and the ordered $10 million payment, was reaffirmed by U.S. District Judge James I. Cohn after defense notions to dismiss the ruling were denied.