The 1925 constitution was the second major charter in Chilean history, lasting until 1973. It codified significant changes, including the official separation of church and state, which culminated a century of gradual erosion of the political and economic power of the Roman Catholic Church. The constitution also provided legal recognition of workers' right to organize, a promise to care for the social welfare of all citizens, an assertion of the right of the state to infringe on private property for the public good, and increased powers for the now directly elected president in relation to the bicameral Congress, in particular concerning the removal of cabinet ministers, which heretofore had often been removed at the whim of the legislature.

Presidential and congressional elections were staggered so that a chief executive could not bring a legislature in on his coattails. The new constitution extended presidential terms from five to six years, with immediate reelection prohibited. It established a system of proportional representation for parties putting candidates up for Congress. The government was divided into four branches, in descending order of power: the president, the legislature, the judiciary, and the comptroller general, the latter authorized to judge the constitutionality of all laws requiring fiscal expenditures.

The Office of Comptroller General of the Republic (Oficina de la Contraloría General de la República) was designed by a United States economic adviser, Edwin Walter Kemmerer. In 1925 he also created the Central Bank of Chile (see Glossary) and the position of superintendent of banks, while putting the country on the gold standard. His reforms helped attract massive foreign investments from the United States, especially loans to the government.

Although a labor code was not finalized until 1931, several labor and social security laws enacted in 1924 would govern industrial relations from the 1930s to the 1970s. The legislation legalized unions and strikes but imposed government controls over unions. Union finances and elections were subjected to government inspection. The laws also restricted union activities and disallowed national confederations, which therefore subsequently arose outside the legal framework. Only factories with at least twenty-five workers could have an industrial union, even though approximately two-thirds of the industrial enterprises employed four or fewer workers, in effect artisans. Workers in smaller shops could form professional unions with workers of the same skill employed nearby. Agricultural unions remained virtually outlawed or extremely difficult to organize until the 1960s. The code left unions disadvantaged in their bargaining with employers and therefore reliant on political parties as allies. Those allies were crucial because the new code made the state the mediator in labormanagement disputes.

Data as of March 1994