As prime minister, Drnovšek focused on Slovenia's transition to a market economy, addressing such issues as privatization of the economy, reforming the banking system, and restructuring businesses. Under Drnovšek's leadership as prime minister, the country experienced strong economic growth, relatively low inflation, the reorientation of foreign trade towards western markets, and the integration of Slovenia into international organizations. While he was prime minister, Slovenia became a full member of the UN, the IMF, World Bank, Council of Europe, and GATT, and subsequently became a founding member of the WTO. He was also responsible for liberating all political prisoners in Slovenia, there from when it was a part of the former Yugoslavia.
Politically, Drnovšek initially put together a coalition of the Liberal Democrats (the party he led), the Christian Democrats, the United Lit of Social Democrats, and the Social Democratic Party of Slovenia. In 1994, he united the Liberal Democratic Party, the Democratic Party of Slovenia, the Green Party, and the Socialist Party into the Liberal Democracy of Slovenia. In 1997, he headed a coalition of the Liberal Democracy, the Slovene People's Party, and the Democratic Party of Slovene Pensioners. In 2000, he formed a coalition between the Liberal Democracy, the United List of Social Democrats of Slovenia, SLS+SKD Slovenian People's Party, and Democratic Party of Slovene Pensioners.
Upon becoming president, Drnovšek stated he was taking on a great commitment by assuming the position, but he pledged to do his work responsibly and to the best of his abilities. He envisioned a high international profile for Slovenia, imagining that it will take part in creating a future European continent based on common values. He stressed, however, that Slovenia will also take care of its national identity, language, culture, and arts.