A career like no one else can offer: On the conditions for two-party dominance

The determinants of the number of parties competing in any given first-past-the-post election have been widely studied. Much less clear are the conditions required for two parties to dominate all elections across separate districts and at different levels of government. In this paper, I propose a novel model of party formation and show that two parties can only dominate all elections if they provide sufficient opportunities for members while limiting the success of defectors. More specifically, I establish three conditions for two-parties dominance: (i) parties must be divided into a left-wing and a right-wing camp in any two-party equilibrium, (ii) voters at the national level cannot be too concentrated in the centre relative to the most radical districts, and (iii) politicians need to be sufficiently motivated by the desire to win elections at higher levels of government. Furthermore, I establish the existence of a specific two-party equilibrium featuring a centre-left and a centre-right party. I use this equilibrium to illustrate that primaries can reduce the likelihood of entry of third parties. An extension that introduces regionalism shows that high salience of this second dimension of policy is by itself not enough to rule out two-party equilibria.