Juho Laatu wrote:
After some recent discussions and thoughts around two-party systems I
thought it would be interesting to discuss two-party systems also in
a more positive spirit. The assumption is thus that we want the
system to be two-party oriented. We want to have two strong parties,
and one of them should rule. We want to allow only well established
parties with wide support to rule. The first obvious approach is to
ban all other parties than the two leading parties. But maybe we
don't want  to be so brutal. Let's not ban the possibly already
existing, much liked and hopeful third parties. It is also good to
have some competition in the system. Let's not allow the two leading
parties think that they don't have to care about the voters and they
can do whatever they want, and stay in power forever.

What would be a good such method? In addition to what was already
said we surely want e.g. to avoid the classical spoiler problems.

I can think of two simple PR-based methods.

In the first, you use ordinary divisor-based PR, but set the divisors so that they have a great large-party bias (even worse than D'Hondt).

In the second, you also use ordinary divisor-based PR, but top up the list of the largest party so that it always gets 50%+1 of the seats if it would otherwise get below that.

But I think that any two-party system will discourage smaller parties. If only the two major parties can rule, voters will strategically think that "either I can use my vote to grant the lesser evil more seats/power so it can defeat the greater evil, or I can use my vote to vote for a small party that hasn't got a chance beyond being the opposition anyway. I'll do the former". That sort of thinking will create an invisible barrier to third parties, because as long as the third parties aren't large enough that they might win (become one of the top two) with a small amount of additional votes, voters won't vote for them, and if they don't vote for them, they'll never get close enough to the threshold.

I can think of two ways to get around that, but both would bend the definition of a two-party system.

Let's call the first an "explicit coalition system". The election process itself is party list PR. After the election is done, a group of parties with a total vote share greater than a majority must form a coalition; they do so by an internal supermajority vote, after which this group gets the government and the rest becomes the opposition. After that is done, they rule until at least one of the parties (or some fraction of the whole group), plus the opposition (or supermajority thereof), agrees to dissolve the current coalition. After that is done, there are new elections. The current coalition rules until the next coalition can organize itself.

The second, I'd call "PR by credit". Again, votes are counted as in party list. Each party also has an "account". After the election, the number of votes for each party is added to the relevant party's account. Then the parties allocate votes to gain seats in a continuous bidding process. That is, call parties 1...n's current bids, B_1...B_n. Then the tentative seats allocation is according to some major-party biased divisor method that considers B_1...B_n the number of votes each party got. The seats count is updated continuously until the timeout, then each party's bid is withdrawn from its account. While it is unfair in any given election, the smaller parties can accumulate votes in their accounts and later use this to take the throne of government, if for only a term. However, I think this kind of hybrid monetary system would have some adverse results. First, it would cause great oscillations. The composition of the parliament could swing hard left, with lots of, say, environmental bills, then swing hard right, with the new government scrambling to undo those bills and to impose their own, then swing hard left again, each sweep of the pendulum causing chaos. Second, differences in turnout could add more noise: if there's less turnout, there's less of an impact to each party's account.

P.S. Could there be also three-party or n-party systems? Limiting the
number of parties to n would be an alternative to thresholds. This
approach could be used also in a two-party system, i.e. set the
threshold e.g. to 33% (or lower, or higher). Does the proposed method
work better than such thresholds or simply picking two largest
parties?

The approaches above could be adjusted to n-party systems, yes.

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