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A two-party system is a form of party system where two major political parties dominate voting in nearly all elections, at every level. As a result, all, or nearly all, elected offices end up being held by candidates endorsed by one of the two major parties. Coalition governments occur only rarely in two-party systems.

Under a two-party system, one of the two parties typically holds a plurality in the legislature (or a legislative house in a bicameral system), and is referred to as the majority party. The smaller party is referred to as the minority party. Two-party systems are most common in polities with plurality vote counting system ("first past the post") to prevent the problem of two similar candidates "splitting" the same voters.

Notable examples of countries with two-party systems include the United States and Jamaica. Though these countries are often thought of as being two-party states, other parties may have small but significant bases of support and have seen candidates elected to local or subnational office.

Generally, a two-party system becomes a dichotomous division of the political spectrum with an ostensibly right-wing and left-wing party: Tories vs. Labour in some Commonwealth countries, Republicans vs. Democrats in the United States, and so on.

In some governments, certain chambers may resemble a two-party system and others a multiparty system. For example, the politics of Australia are largely two-party (if the Liberal Party and National Party are considered the same party at a national level due to their long-standing alliance) for the Australian House of Representatives, which is elected by a plurality ballot. However, third parties are more common in the Australian Senate, which uses a proportional voting system more amenable to minor parties.

The Politics of Malta are somewhat unusual in that while the electoral system is single transferable vote (STV), traditionally associated with proportional representation, minor parties have not earned much success. No third parties won any seats in the Parliament in Malta's most recent 2008 election, for example. The Labour Party and the Nationalist party are the dominant parties.

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