During the three decades after 1930 – and indeed until the coup which brought down the government of Salvador Allende in 1973 – Chilean politics were unique in Latin America. Only Chile sustained in this period an electoral democracy including major Marxist parties. And for almost fifteen years, between 1938 and 1952, Radical presidents held power through the support, erratic but persistent, of both the Socialists and the Communists, with lasting consequences for the nation's political development. These multi-party governments based on multi-class alliances simultaneously pursued industrial growth and social reform. They failed, however, to attack the roots of Chilean underdevelopment in either the latifundia-dominated rural sector or the United States-dominated external sector.

From the 1930s Chilean reformers criticized the excessive national dependence on the foreign sector that had been highlighted by the world depression. After that crisis, Chile gradually achieved greater self-sufficiency: between the 1920s and the 1940s the estimated share of gross domestic product (GDP) being sold abroad declined from approximately 40 to 20 per cent, as did foreign capital as a proportion of the total capital in Chile. By contrast, direct U.S. investments grew by 80 per cent from 1940 to 1960, the vast majority of this foreign capital going to the mining sector. Overwhelmingly controlled by U.S. companies from the 1920s to the 1960s, copper came to account for some 50 per cent of Chilean exports, copper and nitrates nearly 80 per cent. Not only was the United States the leading foreign investor in Chile; it also regained its position as Chile's premier trading partner after a spurt of German competition in the 1930s.