In a closely-controlled referendum, 67 percent of Chileans reportedly endorse a new constitution legitimizing the military government. According to the constitution, Pinochet will head the military government until 1989, with an election in 1988 to determine if the general would get another 8 years in office. Pinochet turns the economy back to a free-market system.

Pinochet returns government-held land and businesses back to their former owners and reduces the role of government in social security, labor disputes, education and health care.