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Not quite so much in New Zealand. Yes, our first election under PR led to a populist anti-immigrant party playing the two main parties off against one another - but the backlash against that sort of behaviour almost destroyed them. Since then, our minor parties have been a lot more reasonable in their expectations.
Of course, we're only on our 4th PR election, and we're still really getting used to it.
Furthermore, a PR system gives a huge amount of power to the unelected internal party leadership.
This IMHO is the really big flaw, as it utterly stifles internal dissent. Imagine Tony Blair under MMP; he wouldn't have to worry about any backbench rebellions, because he'd simply ensure that the list was packed with his supporters.
In NZ we have a further criticism: that by virtually guaranteeing coalition government, PR stops parties from "getting things done" and enacting "necessary" reforms. This is voiced almost solely by relics from the neo-liberal era, who used FPP's "elected dictatorship" to ram change through without consultation (or even announcing that that was what their party stood for at election time), and who still haven't got the message that that's precisely why we wanted it in the first place.
Idiot/Savant No Right Turn - New Zealand's liberal blog
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