The year 1880 marked a major turning point in Bolivian history. To contemporaries, the most dramatic event of this year was the utter defeat of Bolivian arms at the hands of the Chilean invaders and the loss of its entire coastal territory in the War of the Pacific. Less dramatic but equally important was the establishment of a new government to replace the previous caudillo regime. Although the replacement of governments by military coups was a common feature of political life in the republic since its creation fifty-five years previously, the new regime did in fact mark a fundamental change in national political development. It represented the first viable republican government of a civilian oligarchic nature, which would become the norm of political life until 1934. Although the loss of its direct access to the sea would remain the most intransigent of Bolivia's international problems from 1880 to the present day, the establishment of a modern political party system and a civilian-dominated government would cause long-term political, economic, and eventually even social and cultural changes within Bolivian society, changes that were profoundly to shape its historical evolution.

The fundamental stabilization and maturation of Bolivian politics after 1880 was not the result of the war with Chile but rather derived from basic changes within the Bolivian economy that had begun at least thirty years previously. Starting approximately at mid-century, the silver mining industry had broken almost half a century of depression and had begun to reorganize on a massive scale.