The Independent Socialist Party (Partido Socialista Independiente, PSI) was founded in March 1938 by Víctor Paz Estenssoro, Carlos Salamanca, Jorge Araoz Campero, Carlos Montenegro and Augusto Cespedes, following a split in the United Socialist Party. 
The Independent Socialist Party was associated with the revolutionary government of Colonel Germán Busch Becerra, between 1937 and 1939. For the 1938 elections, the Independent Socialist Party was the component of the pro-military United Socialist Front. 
During the 1938 Constituent Assembly, the Independent Socialists were an influential element of the leftist political grouping. Many of the PSI's founders were student activists, war veterans, and journalists of the middle class. 
The Independent Socialists elected some deputies of National Congress in 1940, and during of Enrique Peñaranda del Castillo's administration they were among the government's opponents in parliament. 
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- Political handbook of the world 1940. New York, 1940. P. 12.
- Waltraud Q. Morales. Bolivia: land of struggle. Westview Press, 1992. P.162.
- Political parties of the Americas: Canada, Latin America, and the West Indies, Vol.1. Greenwood Press, 1982. P.146.
- Political parties of the Americas: Canada, Latin America, and the West Indies. Greenwood Press, 1982. P. 136.