The Estado Novo (, ) was the corporatist Portuguese state installed in 1933. It evolved from the Ditadura Nacional ("National Dictatorship") formed after the coup d'état of 28 May 1926 against the unstable First Republic. Together, the Ditadura Nacional and the Estado Novo are recognised by historians as the Second Portuguese Republic (). The Estado Novo, greatly inspired by conservative and autocratic ideologies, was developed by António de Oliveira Salazar, who was President of the Council of Ministers from 1932 until illness forced him out of office in 1968.
Opposed to communism, socialism, syndicalism, anarchism, liberalism and anti-colonialism, the regime was conservative, corporatist, and nationalist in nature, defending Portugal's traditional Catholicism. Its policy envisaged the perpetuation of Portugal as a pluricontinental nation under the doctrine of lusotropicalism, with Angola, Mozambique, and other Portuguese territories as extensions of Portugal itself, it being a supposed source of civilization and stability to the overseas societies in the African and Asian possessions. Under the Estado Novo, Portugal tried to perpetuate a vast, centuries-old empire with a total area of , while other former colonial powers had, by this time, largely acceded to global calls for self-determination and independence of their overseas colonies.
Portugal joined the United Nations (UN) in 1955 and was a founding member of NATO (1949), the OECD (1961), and EFTA (1960). In 1968, Marcelo Caetano was appointed prime minister replacing an aged and debilitated Salazar; he continued to pave the way towards economic integration with Europe and a higher level of economic liberalization in the country, achieving the signing of an important free-trade agreement with the European Economic Community (EEC) in 1972.
From 1950 until Salazar's death in 1970, Portugal saw its GDP per capita increase at an annual average rate of 5.7 per cent. Despite the remarkable economic growth, and economic convergence, by the fall of the Estado Novo in 1974, Portugal still had the lowest per capita income and the lowest literacy rate in Western Europe (although this also remained true following the fall, and continues to the present day). On 25 April 1974, the Carnation Revolution in Lisbon, a military coup organized by left-wing Portuguese military officers – the Armed Forces Movement (MFA) – led to the end of the Estado Novo.
Prelude
King Carlos I of Portugal confirmed colonial treaties of the 19th century that stabilized the situation in Portuguese Africa. These agreements were, however, unpopular in Portugal, where they were seen as being to the disadvantage of the country. In addition, Portugal was declared bankrupt twice – first on 14 June 1892 and again on 10 May 1902 – causing industrial disturbances, socialist and republican antagonism, and press criticism of the monarchy. Carlos responded by appointing João Franco as Prime Minister and subsequently accepting Parliament's dissolution. In 1908, Carlos I was assassinated in Lisbon by anti-monarchists. The Portuguese monarchy lasted until 1910 when, through the 5 October revolution, it was overthrown and Portugal was proclaimed a republic. The overthrow of the Portuguese monarchy in 1910 led to a 16-year struggle to sustain parliamentary democracy under republicanism – the Portuguese First Republic (1910–1926).
The 28 May 1926 coup d'état or, during the period of Estado Novo, the National Revolution (), was a military action that put an end to the chaotic Portuguese First Republic and initiated the Ditadura Militar (Military Dictatorship) which in 1928 transitioned into the Ditadura Nacional (National Dictatorship). Salazar became Prime Minister in 1932, and in 1933 renamed it as the Estado Novo (New State), defining Portugal as a corporative, single-party and multi-continental country.
With fascist organizations being popular and widely supported across many countries (like Italian Fascism and National Socialism) as an antagonist of communist ideologies, António de Oliveira Salazar developed the Estado Novo, which can be described as a right-leaning corporatist government. The basis of his regime was a platform of stability, in direct contrast to the unstable environment of the First Republic.