Czechoslovakia was one of the few states in Europe between the two World Wars with a genuine parliamentary democracy (guaranteed by the Constitution of February 1920). Even the Communist Party of Czechoslovakia (which had been established in 1921) was allowed to legally exist which was very unusual for the time. After dealing with post-war chaos and putting down a few radical Bolshevist uprisings, the social, political and economic situation in Czechoslovakia was basically stable by the beginning of the 1920s.  In the 20 years between the two World Wars, Czechoslovakia was one of the world's most advanced industrial-agrarian countries. In fact, it was among the 10 richest nations in the world at that time, as it had inherited in effect, Austria’s entire industrial base.

At the end of the twenties and the beginning of the thirties, the Czechoslovak economy was hit hard by the world economic crisis with disastrous social and political consequences; 1.3 million people were made unemployed. Hardest hit were the soon-to-be-known-as-Sudeten border regions, where German inhabitants predominated. The economic crisis and the growing influence of the Nazi movement in Germany served to politicise the ethnic Germans in Czechoslovakia. On Hitler's orders, they called first for autonomy, then for secession from the Czechoslovak State.