His philosophy of "spiritual socialism" (also known as Arevalismo)in the period after World War II was viewed as being akin to communism by international players such as the United States, and this was much cause for international unease. Arévalo was succeeded by Jacobo Arbenz, who continued the reformist approach of Arévalo's government. However, "spiritual socialism" might be considered less an economic system than a movement of the liberation of the imagination of the oppressed people of Latin America. Arévalo, as an educator and philosopher, understood the need for the enlargement in individuals, communities, and nations of the concept and praxis of what is possible.

During his six year term, Arévalo's rule was marked by the unprecedented existence of a relatively free political system, with several parties. trade unions and the enfranchisement of a large proportion of the population. In the cities, the advent of Unions was accompanied by labour laws which greatly benefitted the lower and middle classes, although these benefits did not spread to the agrarian rural areas where conditions were still harsh. Whilst the government made some efforts to improve peasants' rights, the situation in rural Guatemala could not be improved without large scale agrarian reform, including land redistribution. The lack of this reform was a major weakness of the administration, and a problem which his successor attempted to confront.