Significant loss of life and territory discredited the traditional ruling classes, while service in the army produced stirrings of political awareness among the indigenous people.

[1] The Liberal Party's long rule of Bolivia, one of the most stable periods in the country's history, ended when the Republicans seized the presidency in a bloodless coup d'état in 1920.

Saavedra (1920–25) and Hernando Siles Reyes (1926–30) borrowed heavily in the United States to finance major development projects, despite opposition by Bolivian nationalists to the favorable terms for the lender.

[2] The social legislation of the Republican governments was weak, however, because neither Saavedra nor Siles Reyes wanted to challenge the rosca (tin mining magnates' political representatives).

[2] Although he was an esteemed economist before taking office, Salamanca was unable to suppress social unrest and to solve the severe economic problems caused by the Great Depression.

Initially reluctant to enter into an armed conflict with Paraguay, he nevertheless led Bolivia into the Chaco war, a move supported by the military and traditional groups.

Despite mediation attempts by various countries, the increased number of border incidents led the military high commands of Bolivia and Paraguay to prepare for the inevitability of war.

[4] President Salamanca used one of the border incidents to break diplomatic relations with Paraguay and to increase Bolivia's military budget, even though the country had severe economic problems.

On June 14, 1935, a commission of neutral nations (Argentina, Brazil, Chile, Colombia, Peru, and the United States) declared an armistice; a definite settlement was finally reached in 1938.

Unable to deal with growing criticism, its members blamed the loss of the war on the low potential of the Bolivians and saw the earlier pessimistic assessment in Alcides Arguedas's famous novel Pueblo Enfermo (A Sick People) confirmed.

[5] Toro attempted to get civilian support with far-reaching social legislation and nominated a print worker as the first labor secretary in Bolivia.

He also nationalized the holdings of Standard Oil without compensation and called for convening a constitutional congress that would include the traditional parties, new reformist groups, and the labor movement.

A group of more radical officers resented his reluctance to challenge the rosca, and they supported a coup by Colonel Germán Busch Becerra (1937–39) in 1937.

A new constitution was promulgated in 1938, stressing the primacy of the common good over private property and favoring government intervention in social and economic relations.

The Leftist Revolutionary Party (Partido de Izquierda Revolucionaria, PIR) was founded in 1940 by a coalition of radical Marxist groups.

[6] As the leader of the congressional opposition, the MNR denounced Peñaranda's close cooperation with the United States and was especially critical of his agreement to compensate Standard Oil for its nationalized holdings.

It sought mass support, backed military intervention in politics, and hoped to prevent excessive foreign control over Bolivia's natural resources.

Paz Estenssoro, who served as finance minister, hoped to get popular support with a budget emphasizing social spending over economic development.

He had been unable to organize popular support and faced opposition from conservative groups and increasing political terrorism that included murders of the government's opponents.

Enrique Hertzog Garaizabal (1947–49), who was elected president in 1947 after the interim rule of a provisional junta, formed a coalition cabinet that included not only the concordancia but also the PIR.

He hoped to retain the backing of the Conservative Party forces by not increasing taxes, but he also tried to gain labor support, relying on the PIR to mobilize the workers.

With the support of the POR and the newly formed Bolivian Communist Party (Partido Comunista de Bolivia, PCB), the MNR won with a clear plurality.

A disagreement with the United States over tin prices temporarily halted exports and caused a decline in income, further hurting the economy.

[7] The social unrest that resulted from this economic decline increased during the last weeks before the 1952 National Revolution when a hunger march through La Paz attracted most sectors of society.

The military was severely demoralized, and the high command called unsuccessfully for unity in the armed forces; many officers assigned themselves abroad, charged each other with coup attempts, or deserted.

[7] By the beginning of 1952, the MNR again tried to gain power by force, plotting with General Antonio Seleme, the junta member in control of internal administration and the National Police (Policía Nacional).

Miners immediately organized the Bolivian Labor Federation (Central Obrera Boliviana, COB), which demanded radical change, participation in the government, and benefits for its members.

Whereas the left wing demanded more government control over the economy, the right-wing hoped to solve the nation's problems with aid from the United States.

[12] During his administration, the strength of the armed forces grew due to a new concern for professionalism and training, technical assistance from the United States, and an increase in the size and budget of the military.

Together with the United States, the Federal Republic of Germany, and the Inter-American Development Bank, Paz Estenssoro endorsed the "Triangular Plan", which called for a restructuring of the tin-mining industry.