The ruling United Democratic Party (UDP) was widely perceived as incompetent, incapable of governing and riddled with corruption. Crime and unemployment rose while a number of government projects were universally panned. After winning nationwide municipal elections in 1994, they had lost two other municipal votes in 1996 and 1997. The PUP capitalized on the people's anger to present a manifesto of far-reaching proposals which they claimed would "Set Belize Free".
Prime Minister Manuel Esquivel advised Governor General Sir Colville Young to dissolve the House of Representatives on 13 July 1998. The House stood dissolved with effect from 15 July 1998.
Election day was set for 27 August 1998. Nomination day was 11 August 1998; five political parties nominated 79 candidates, with three independents contesting.
One controversy as the election date drew near was PM Dean Barrow's rushed appointment of Manuel Sosa to the position of Chief Justice of the Supreme Court on 19 August to replace the ailing George Singh, just days before the election. Then-opposition leader Said Musa objected to this last minute appointment, and after his party took power was able to have it overturned on the grounds that he had not been properly consulted on the appointment as required by the constitution.