Melt the butter or margarine in a large skillet over medium heat. Add the potatoes and spread out in an even layer. Cover and cook for about 5 minutes. Season with garlic, paprika, salt and pepper; stir to coat potatoes evenly.
Cover and cook for another 15 minutes, turning potatoes occasionally. Remove cover, and mix in chives. Increase heat to medium-high and cook for another 10 minutes, stirring frequently, or until potatoes are tender.