Democratic transition
In 1993, Gonzalo Sánchez de Lozada was elected president in alliance with the Tupac Katari Revolutionary Liberation Movement, which inspired indigenous-sensitive and multicultural-aware policies. Sánchez de Lozada pursued an aggressive economic and social reform agenda. The most dramatic reform was privatization under the "capitalization" program, under which investors, typically foreign, acquired 50% ownership and management control of public enterprises in return for agreed upon capital investments. In 1993, Sanchez de Lozada introduced the Plan de Todos, which led to the decentralization of government, introduction of intercultural bilingual education, implementation of agrarian legislation, and privatization of state owned businesses. The plan explicitly stated that Bolivian citizens would own a minimum of 51% of enterprises; under the plan, most state-owned enterprises (SOEs), though not mines, were sold. This privatization of SOEs led to a neoliberal structuring.
The reforms and economic restructuring were strongly opposed by certain segments of society, which instigated frequent and sometimes violent protests, particularly in La Paz and the Chapare coca-growing region, from 1994 through 1996. The indigenous population of the Andean region was not able to benefit from government reforms. During this time, the umbrella labor-organization of Bolivia, the Central Obrera Boliviana (COB), became increasingly unable to effectively challenge government policy. A teachers' strike in 1995 was defeated because the COB could not marshal the support of many of its members, including construction and factory workers.
In the 1997 elections, General Hugo Banzer, leader of the Nationalist Democratic Action party (ADN) and former dictator (1971–1978), won 22% of the vote, while the MNR candidate won 18%. At the outset of his government, President Banzer launched a policy of using special police-units to eradicate physically the illegal coca of the Chapare region. The Revolutionary Left Movement (MIR) of Jaime Paz Zamora remained a coalition-partner throughout the Banzer government, supporting this policy (called the Dignity Plan). The Banzer government continued the free-market and privatization-policies of its predecessor. The relatively robust economic growth of the mid-1990s continued until about the third year of its term in office. After that, regional, global and domestic factors contributed to a decline in economic growth. Financial crises in Argentina and Brazil, lower world prices for export commodities, and reduced employment in the coca sector depressed the Bolivian economy. The public also perceived a significant amount of public sector corruption. These factors contributed to increasing social protests during the second half of Banzer's term.
Between January 1999 and April 2000, large-scale protests erupted in Cochabamba, Bolivia's third largest city at the time, in response to the privatization of water resources by foreign companies and a subsequent doubling of water prices. On 6 August 2001, Banzer resigned from office after being diagnosed with cancer. He died less than a year later. Vice President Jorge Fernando Quiroga Ramírez completed the final year of his term.
In the June 2002 national elections, former President Gonzalo Sánchez de Lozada (MNR) placed first with 22.5% of the vote, followed by coca advocate and native peasant leader Evo Morales (Movement Toward Socialism, MAS) with 20.9%. A July agreement between the MNR and the fourth-place MIR, which had again been led in the election by former President Jaime Paz Zamora, virtually ensured the election of Sánchez de Lozada in the congressional run-off, and on 6 August he was sworn in for the second time. The MNR platform featured three overarching objectives: economic reactivation (and job creation), anti-corruption, and social inclusion.
In 2003, the Bolivian gas conflict broke out. On 12 October 2003, the government imposed martial law in El Alto after 16 people were shot by the police and several dozen wounded in violent clashes. Faced with the option of resigning or more bloodshed, Sánchez de Lozada offered his resignation in a letter to an emergency session of Congress. After his resignation was accepted and his vice president, Carlos Mesa, became president, he left on a commercially scheduled flight for the United States.
The country's internal situation became unfavorable for such political action on the international stage. After a resurgence of gas protests in 2005, Carlos Mesa attempted to resign in January 2005, but his offer was refused by Congress. On 22 March 2005, after weeks of new street protests from organizations accusing Mesa of bowing to U.S. corporate interests, Mesa again offered his resignation to Congress, which was accepted on 10 June. The chief justice of the Supreme Court, Eduardo Rodríguez, was sworn as interim president to succeed the outgoing Carlos Mesa.
Evo Morales won the 2005 presidential election with 53.7% of the votes. On 1 May 2006, Morales announced his intent to re-nationalize Bolivian hydrocarbon assets following protests which demanded this action. Fulfilling a campaign promise, on 6 August 2006, Morales opened the Bolivian Constituent Assembly to begin writing a new constitution aimed at giving more power to the indigenous majority.
2009 marked the creation of a new constitution and the renaming of the country to the Plurinational State of Bolivia. The previous constitution did not allow a consecutive reelection of a president, but the new constitution allowed for just one reelection, starting the dispute if Evo Morales was enabled to run for a second term arguing he was elected under the last constitution. This also triggered a new general election in which Evo Morales was re-elected with 61.36% of the vote. His party, Movement for Socialism, also won a two-thirds majority in both houses of the National Congress. By 2013, after being reelected under the new constitution, Evo Morales and his party attempted a third term as President of Bolivia. The opposition argued that a third term would be unconstitutional, but the Bolivian Constitutional Court ruled that Morales' first term under the previous constitution did not count towards his term limit. This allowed Evo Morales to run for a third term in 2014, and he was re-elected with 64.22% of the vote. During his third term, Evo Morales began to plan for a fourth, and the 2016 Bolivian constitutional referendum asked voters to override the constitution and allow Evo Morales to run for an additional term in office. Morales narrowly lost the referendum; however, in 2017 his party then petitioned the Bolivian Constitutional Court to override the constitution on the basis that the American Convention on Human Rights made term limits a human rights violation. The Inter-American Court of Human Rights determined that term limits are not a human rights violation in 2018; however, once again the Bolivian Constitutional Court ruled that Morales has permission to run for a fourth term in the 2019 elections, and this permission was not retracted. "[T]he country's highest court overruled the constitution, scrapping term limits altogether for every office. Morales can now run for a fourth term in 2019 – and for every election thereafter."
The revenues generated by the partial nationalization of hydrocarbons made it possible to finance several social measures: the Renta Dignidad (or old age minimum) for people over 60 years old; the Juana Azurduy voucher (named after the revolutionary Juana Azurduy de Padilla, 1780–1862), which ensures the complete coverage of medical expenses for pregnant women and their children in order to fight infant mortality; the Juancito Pinto voucher (named after a child hero of the Pacific War, 1879–1884), an aid paid until the end of secondary school to parents whose children are in school in order to combat school dropout, and the Single Health System, which since 2018 has offered all Bolivians free medical care.
The reforms adopted made the Bolivian economic system the most successful and stable in the region. Between 2006 and 2019, GDP grew from $9 billion to over $40 billion, real wages increased, GDP per capita tripled, foreign exchange reserves rose, inflation was essentially eliminated, and extreme poverty fell from 38% to 15%, a 23-point drop.
During the 2019 elections, the Transmisión de Resultados Electorales Preliminares (TREP) (a quick count process used in Latin America as a transparency measure in electoral processes) was interrupted; at the time, Morales had a lead of 46.86 percent to Mesa's 36.72, after 95.63 percent of tally sheets were counted. Two days after the interruption, the official count showed Morales fractionally clearing the 10-point margin he needed to avoid a runoff election, with the final official tally counted as 47.08 percent to Mesa's 36.51 percent, starting a wave of protests and tension in the country.
Amidst allegations of fraud perpetrated by the Morales government, widespread protests were organized to dispute the election. On 10 November, the Organization of American States (OAS) released a preliminary report concluding several irregularities in the election, though these findings were heavily disputed. The New York Times reported on 7 June 2020 that the OAS analysis immediately after the 20 October election was flawed yet fuelled "a chain of events that changed the South American nation's history".
After weeks of protests, Morales resigned on national television shortly after the Commander-in-Chief of the armed forces General Williams Kaliman had urged that he do so to restore "peace and stability". Opposition Senator Jeanine Áñez declared herself interim president, claiming constitutional succession after the president, vice president and both head of the legislature chambers. She was confirmed as interim president by the constitutional court who declared her succession to be constitutional and automatic. International politicians, scholars and journalists are divided between describing the event as a coup or a spontaneous social uprising against an unconstitutional fourth term. Protests to reinstate Morales as president continued becoming highly violent: burning public buses and private houses, destroying public infrastructure and harming pedestrians. The protests were met with more violence by security forces against Morales supporters after Áñez exempted police and military from criminal responsibility in operations for "the restoration of order and public stability".
In April 2020, the interim government took out a loan of more than $327 million from the International Monetary Fund to meet the country's needs during the COVID-19 pandemic. New elections were scheduled for 3 May 2020. In response to the coronavirus pandemic, the Bolivian electoral body, the TSE, made an announcement postponing the election. MAS reluctantly agreed with the first delay only. A date for the new election was delayed twice more, in the face of massive protests and violence. The final proposed date for the elections was 18 October 2020. Observers from the OAS, UNIORE, and the UN all reported that they found no fraudulent actions in the 2020 elections.
The general election had a record voter turnout of 88.4% and ended in a landslide win for MAS which took 55.1% of the votes compared to 28.8% for centrist former president Carlos Mesa. Both Mesa and Áñez conceded defeat.
On 8 November 2020, Luis Arce was sworn in as President of Bolivia alongside his Vice President David Choquehuanca. In February 2021, the Arce government returned an amount of around $351 million to the IMF. This comprised a loan of $327 million taken out by the interim government in April 2020 and interest of around $24 million. The government said it returned the loan to protect Bolivia's economic sovereignty and because the conditions attached to the loan were unacceptable.
On 26 June 2024, a military coup attempt led by Juan José Zúñiga ended after lasting only 5 hours. In the evening of 26 June, Bolivian police arrested Zúñiga.
In October 2025, Rodrigo Paz of the centre-right Christian Democratic Party (PDC) won the run-off race of the election against right-wing former president Jorge Quiroga, meaning the end of governance by the Movement for Socialism (MAS) party and a clear political shift to the right.
On 8 November 2025, Rodrigo Paz was sworn in as Bolivia's new president during Bolivia's worst economic crisis in 40 years.
