Voting stations opened at 12pm and closed at 4pm, with initial results expected after 9pm.
The winner will take office on Nov 8.
The race pits centrist senator Rodrigo Paz against conservative former president Jorge “Tuto” Quiroga.
Both candidates have pledged to strengthen diplomatic ties with Washington – strained since 2009 – and seek US-backed financial support to stabilise Bolivia’s fragile economy.
The runoff between two pro-market candidates from privileged backgrounds signals an epochal shift for Bolivia, following two decades of dominance by the leftist Movement to Socialism party, founded by Evo Morales and once backed by the country’s Indigenous majority.
For some voters the finalists echo the conservative governments of the 1990s, which championed privatisation and close relations with the US.
Morales, who took power in 2006 and was Bolivia’s first Indigenous leader, pursued alliances with Cuba, Venezuela and Russia, and nationalized the oil and gas industry.
“This election marks a political turning point,” said Glaeldys Gonzalez Calanche, analyst for the Southern Andes at International Crisis Group.
“Regardless of the outcome, “Bolivia is heading in a new direction,” she said.
Quiroga has promised “radical change,” including deep cuts to public spending and closing or privatizing loss-making state-owned companies.
Paz favours a more gradual approach, maintaining social programmes for the poor while promoting private-sector growth.
Opinion polls show Quiroga with a narrow lead. A September Ipsos survey gave him 47% support to Paz’s 39%, though Paz outperformed expectations in the August first round.
Voters want economic change
Paz in late September announced plans for an economic cooperation deal worth US$1.5 billion with US officials to ensure fuel supplies, while Quiroga is pushing for a US$12 billion international bailout backed by multilateral lenders.
US secretary of state Marco Rubio said this week that both presidential candidates “want stronger, better relations with the US,” after decades of anti-American leadership.
“This election is a transformative opportunity,” he said on Wednesday.
Some Bolivians have voiced fears of austerity measures such as those seen in neighboring Argentina under President Javier Milei, though Paz has rejected drastic spending cuts and Quiroga insists his policies will benefit ordinary Bolivians.
Support for the Movement to Socialism all but collapsed in the election’s first round.
Inflation has surged to 23% since the start of the year, while fuel and dollar shortages have crippled consumer demand. Natural gas exports – once Bolivia’s economic engine – have plummeted, straining the boliviano currency and limiting fuel imports.
In La Paz’s commercial district, appliance stores are shuttered and shops empty of customers.
“There are months with zero sales,” said Mercedes Quisbert, head of the local Importers’ Association.
Up until this year, shopkeepers and street-sellers had been just about managing to weather the crisis, she said – but not anymore.
Bolivia has one of Latin America’s highest rates of informal employment, with around 84% of the population working outside the formal labor market, according to official data. Millions rely on buying and selling goods to make a living.
“We’re basically surviving,” said Marcela Martinez, 52, as she compared prices at a market in La Paz.
She was planning to vote for Paz today. “We need new people to come in,” she added.