The parliamentary election of July 1987 was a milestone in the consolidation of Portuguese democracy in that it gave for the first time in the Second Republic a single party, the PSD, an absolute majority in the Assembly of the Republic and permitted the formation of a strong single-party government. The party's leader, Aníbal Cavaco Silva, ran an efficient campaign that stressed the PSD's competence and pragmatism and avoided the ideological arguments common to Portuguese politics. The party won a comfortable majority of 148 seats in the assembly when 50.2 percent of the voters, a stunning increase over the 29.9 percent who voted for it in the 1985 elections, decided Portugal needed to continue the PSD's program of reducing the government's role in the economy. Most of the PSD's increased share of the votes came from the virtual collapse of the PRD and the severe losses of the CDS. The PS improved significantly its performance compared to 1985, while the PCP continued its decline toward political marginality.

An improving economy contributed to the PSD victory, but also essential to its success was the party's leader since 1985, Aníbal Cavaco Silva. He captured the imagination of many Portuguese, who saw him as a welcome alternative to traditional Portuguese politicians. Cavaco Silva differed from Portugal's narrow governing elite in many respects. He was not from Lisbon but came from a lower-middle class southern family. He was not a lawyer but an economist who had earned his doctorate from the University of York in Britain and subsequently taught economics in Lisbon. Although for a time minister of finance in the early 1980s, he did not favor political games and intrigues but publically disdained these aspects of party politics. Observers frequently characterized Cavaco Silva as somewhat aloof and arrogant, more interested in competence than connections. Through hard work and intelligence, he was able to thwart even powerful members of his own party who resisted reform and modernization. These qualities won Cavaco Silva the votes of many younger people and members of the middle class.

Supported by a majority in parliament, Cavaco Silva's government, in which he served as prime minister, aimed at a liberalization of the Portuguese economy. A principal goal was to further revise the constitution by removing much of its ideological language. The two-thirds majority this undertaking required was achieved with help from the PS. Another goal was a reform of the constitution's provisions relating to the dismissal of employees which were so strict that firings were very difficult. Some relaxation of labor law was achieved but not nearly that which had been envisaged. A general strike in early 1988 and a judgment from the Constitutional Court that the government's proposals were unconstitutional prevented radical reform in this area (see Wages and the Distribution of Income, ch. 3). The Cavaco Silva government had much more success in privatizing land and businesses nationalized in 1975 (see Land Tenure and Agrarian Reform Industrial Organization , ch. 3). By the end of 1991, many of the largest companies seized by the state had been returned in whole or in part to the private sector, and further privatizations were scheduled.

A presidential election was held in January 1991 as Mário Soares completed the five-year term. Faced with only token opposition, Soares won easily, taking 70 percent of the vote. Such was the expectation of his victory that the PSD did not even field a candidate. Despite his reputation of being a highly partisan leader of the PS and the narrowness of his victory in 1986, Soares had quickly become a very popular president. In general, he and Cavaco Silva got along well with one another as they carried out the duties of their respective offices. Soares interfered only rarely in the working of the cabinet and legislature and when confronted with difficult political issues, called upon the Constitutional Court for a decision. He instituted a practice of informal town meetings throughout Portugal where he learned of the concerns of the average citizen. An articulate speaker, he was later able to voice these concerns himself and plead publicly for the betterment of social conditions. Soares also represented his country ably abroad.

Parliamentary elections were held in October 1991 when the Cavaco Silva government completed the four-year legislative term, the first government to do so in the Second Republic. Although the PSD was expected to win a majority, few expected it to better its results of 1987, but it did so by a tiny margin and once again achieved an absolute parliamentary majority. An economy that had performed better than the EC average, thanks in part to the billions of dollars the organization had transferred to Portugal since 1986, helped achieve Cavaco Silva's second triumph, but his own popularity also played a role. He conducted a highly effective campaign that was centered on his capabilities as prime minister. Assurances from Cavaco Silva that he would not serve in a PSD government that did not have a clear majority probably caused many voters to favor his party. As in 1987, the PSD did well in all parts of the country. It failed to come in first in only one district, compared to three in 1987, an indication that the old regional cleavages were disappearing as the country modernized and became more prosperous.

The PSD's main opponent in the 1991 election was the PS, which polled 29.3 percent of the vote, a significant improvement over the results of 1987 and 1985. The PS's success, despite a poorly run campaign and long-standing leadership problems since Soares had relinquished his role, indicated that Portugal was perhaps moving toward an essentially two-party system. Although the PS trailed the PSD badly in this election, it had won the local elections of 1989. The PS and the PSD seemed to be the only parties in Portugal able to increase their votes. They had also come to resemble one another so closely that their differences on main issues had become marginal.

The PRD, which had scored such a success in the 1985 elections, failed to win a single seat. The PCP received only 8.8 percent of the votes cast, a result that showed the party to be in a steady and steep decline. It remained tied to old orthodoxies, approving the reactionary coup in Moscow in August 1991, for example. The CDS won 4.4 percent of the votes for five seats in parliament, and it did not seem likely to be politically significant in the future, except perhaps as a coalition partner with one of the two largest parties.

Data as of January 1993