This article examines the underlying theory for the proposition that the single-member plurality rule encourages the emergence of a two-party system while other rules favor the emergence of a multiparty system. The key axioms of the theory are that (1) minor parties under the plurality rule cannot translate their popular support into a proportionate parliamentary strength, and (2) political entrepreneurs and a substantial proportion of voters will attempt to maximize their expected utility by stopping their support of minor parties. We argue that the first axiom is true only under certain conditions that cannot be specified without considering the underlying cleavage structure of a society, especially the regional concentration of cleavage groups. We propose a modified theory that subsumes several disparate propositions of prior theory and produces new propositions.