The Quiteño multitudes standing in the pouring rain on May 31, 1944, to hear Velasco promise a "national resurrection," with social justice and due punishment for the "corrupt Liberal oligarchy" that had been responsible for "staining the national honor," believed that they were witnessing the birth of a popular revolution. Arroyo partisans were promptly jailed or sent into exile, while Velasco verbally baited the business community and the rest of the political right. The leftist elements within Velasco's Democratic Alliance, which dominated the constituent assembly that was convened to write a new constitution, were nonetheless destined to be disappointed.

In May 1945, after a year of growing hostility between the president and the assembly, which was vainly awaiting deeds to substantiate Velasco's rhetorical advocacy of social justice, the mercurial chief executive condemned and then repudiated the newly completed constitution. After dismissing the assembly, Velasco held elections for a new assembly, which in 1946 drafted a far more conservative constitution that met with the president's approval. For this brief period, Conservatives replaced the left as Velasco's base of support.

Rather than attending to the nation's economic problems, Velasco aggravated them by financing the dubious schemes of his associates. Inflation continued unabated, as did its negative impact on the national standard of living, and by 1947 foreignexchange reserves had fallen to dangerously low levels. In August, when Velasco was ousted by his minister of defense, nobody rose to defend the man who, only three years earlier, had been hailed as the nation's savior. During the following year, three different men briefly held executive power before Galo Plaza Lasso, running under a coalition of independent Liberals and socialists, narrowly defeated his Conservative opponent in presidential elections. His inauguration in September 1948 initiated what was to become the longest period of constitutional rule since the 1912-24 heyday of the Liberal plutocracy.

Data as of 1989