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Currently in Australia, there are two major parties: The Australian Labor Party and the Australian Liberal Party (which ironically is a conservative party. Currently in Australia it is simply not possible for someone to become Prime Minister if they do not represent one of these political parties.
My question is this: Why does Australia have this two-party system, How did it become this way, and How many other developed countries have a two-party system?
This is not limited to Australia, but rather a by-product of any legislature whose members are selected through plurality voting (a/k/a winner takes all).
The phenomena is called Duverger's Law.
To summarise the process:
- Everyone has nuanced life experiences and separate subtle opinions on law and policy. In the absence of direct democracy, these opinions are aggregated into groups of (presumably) compatible opinions so that more people will roughly support a representative striving to enact those opinions.
- At first these groups (parties) are fairly diverse and certainly more than just two groups. But after each winner-take-all election for an electorate's representative, the parties with least support realise they will never get voted in as their mind-share is too low. So their supporters vote for the closest popular party with roughly compatible policies. The failed party can be considered as 'destroyed' or 'merged into' the successful party.
- This occurs successively over multiple electoral cycles until all diversity and subtlety of opinion collapses into two parties - each full of sweeping useless generalisations and ideological cant.
Or put another way, people don't usually vote for a party that will have no influence in policy. Unless minority coalition governments were explicitly encouraged from the outset; established majority parties will discourage and disparage minority governments since the major parties would prefer to rule less often but completely, than rule more often but share power.
It really comes down to whether ideological reconciliation should happen within the murky internal shadows of each major party or in broad daylight between representatives.
C.G.P Grey has an excellent YouTube video on the problem of plurality voting: http://www.youtube.com/watch?v=s7tWHJfhiyo
Regarding the decision of whether Australia specifically is or isn't a two party system:
A distinction has to be made between the House and Senate.
The Senate has a limited level of proportional representation and so ideological reconciliation occurs in the senate chamber (a good thing) instead within the voting booth as some form of game-theory trying to optimise between two viable options (e.g. Tolerable Party vs Intolerable Party). So we consider the Senate a "multi-party" chamber.
The House is representative in a geographical sense. So each electorate will collapse into two parties; but each electorate may have different political priorities.
However, since major parties are more willing (one supposes) to listen to representatives of their own party than other representatives - representatives are incentivised to belong to (be endorsed by) a major party than be locked out in the cold. Voters vote with much the same rational, so each major party gains national homogeneity and reach - with the expectation of reconciling any geographic differences opaquely and internally within the party.
The instant-runoff voting for the House upsets the apple cart if and only if one of the major parties fails to be broad-based enough to siphon off third party policies in a given electorate (i.e. a majority party swaps places with a minority party).
This is typically hard for a minority party to do - as just like any independent candidate - you can't sell that you will have actual impact unless you really do hold the balance of power in House. This is much rarer in the House than in the Senate given that the very nature of plurality voting provides House landslides to most ruling governments. So if you see any cross-bench MPs in the House, then one or both major parties has a broken base; or rogue members that were disendorsed.
