The transition to democracy in Chile has been rapid and successful. Its consolidation is just beginning and faces serious challenges. It will be necessary to do away with the anomalous political arrangements agreed to for facilitating the transition, and to enhance the social and cultural dimensions of democracy. Export expansion must be strengthened by promoting an industrialization-based outward development and its domestic linkages, through a strategy of development from within. The greater social heterogeneity resulting from heightened international competition calls tor redoubled socioeconomic efforts and the highest effectiveness of public policies, including profound conceptual and institutional changes in order to advance toward basic macrosocial balances. All this calls for a profound reform of the State, which must be transformed into the socially negotiated institutional expression of the above-mentioned interrelated political, economic and social changes.