The process of government formation in Bolivia is unique in the region. If no presidential candidate wins a majority of the vote, congress elects the president from the top two candidates (the top three candidates until the electoral reform in 1995), as in a parliamentary system. This system of indirect presidential election, in the context of a fragmented party system, has encouraged the formation of coalitions and constant negotiations between parties (and sometimes between factions within parties). All these arrangements induce the major parties to seek compromises with potential coalition partners. These negotiations usually include decisions regarding who is to serve in the cabinet. Positions in the cabinet have been traditionally used as a token of exchange for maintaining coalitions.

As the share of legislative seats of the party of the winning presidential candidate has decreased, the number of ministries offered to other parties has increased. For example, in his first term, President Sánchez de Lozada offered only two ministries to other parties after he won a majority in the upper chamber and nearly a majority in the lower chamber. In his second term, when his party won less than half the seats in the upper chamber and less than one-third of the seats in the lower chamber, he offered seven ministries to other parties.

Because the number of ministries is not fixed in the constitution, presidents have also altered the number of ministries to accommodate other parties in the cabinet—while maintaining the majority of the positions. Since the transition to democracy, there has been a negative correlation between the share of the legislative seats controlled by the president’s party and the total number of ministries. During the Paz Zamora presidency, the governing party obtained less than a third of the seats in both chambers, and the number of ministries fluctuated between 16 and 17. Sánchez de Lozada reduced the number of ministries from 16 to 11 in his first term. In the Bánzer/Quiroga administration that followed, in which the government coalition was formed by four parties (three, later on in the presidency), the number of ministries gradually increased to 16. In the second Sánchez de Lozada administration, also supported by a coalition of four parties, the number of ministries grew even more, to 19.