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Here in the Netherlands our house of representatives has 150 seats and they're filled by 15 parties, the biggest of whom has 37 seats, the second 25. People sometimes suggest that political fragmentation makes things more complicated, because usually at least 3 or 4 parties are needed to form a coalition. I don't really think it matters because I look at it this way: there are different views on things in society and compromises need to be found one way or another, it's where this takes place that's different. In one case it's on the conference of 1 or 2 big parties, in the other case it happens in parlement/government where the many small parties meet. The benefit of a many-party system is that people actually got a choice, if you're on the left and don't like what a particular party is doing, you can pick another leftwing party. You don't have that option in a 2-party system, you'll probably stick with your party despite everything you don't like about it. Here, if a party really fucks up, they're done for, a party can get 20% one election and 1% the next one. The system is more dynamic. At the same time, the actual governments usually have an overlap, like there will be different coalitions, but our center-right party has been in the coalition for over a decade now. There may be a certain charm to knowing that every other election a completely new set of people forms the government, but that also has many downsides I think. There'll be little continuity, republicans undo everything democrats have done and in 4 years we'll see the reverse. Haven't heard any really convincing arguments against political fragmentations. It's just the path towards it that may be difficult if you're in a 2 party system, because as soon as you go third party, you're hurting your side of the spectrum. What would be helpfull is if it would happen on both sides simultaneously. Can't you setup a structure where people from both sides would together commit to voting third-party?
Can't really do that with a First-Past-The-Post system because someone needs to get past the post. If there are four major parties (left and right both have significant numbers voting 3rd party), there would ultimately have to be a coalition or two that just ends up being the Republicans and Democrats all over again.
The system itself has to be changed first, and the two parties who benefit from there only being two parties aren't going to change it to allow for that.