This report examines recent political developments in Bolivia between 2004 and 2006 and revisits historic challenges that have shaped the role of Bolivia's political party system in pro-poor reform processes. It takes previous work into the current context under which the political and institutional arrangements of Bolivian democracy are being re-defined, by a pro-poor and popular government, but faced by serious regional and other divisions. The analysis provides a good overview of the evolution of the current political situation and political parties in particular, and insights into the internal and external crisis of the political system.