The latest Policy Quarterly has a fascinating article by political scientist jack Nagel on "Evaluating Democracy in New Zealand under MMP" [PDF]. Nagel assesses our MMP experience against some basic democratic questions: do majorities rule? Do governments receive support from the median voter? Are there permanent minorities or perpetual parties of government? Do small parties have disproportionate power? He finds that our MMP system has performed well, with answers of yes, yes, no, and no respectively. The information on median voters and time spent in government or as an ally of government in particular is fascinating, and shows that MMP is delivering the governments we vote for, and that there is a high degree of political movement, meaning our politics avoids both complacency and corruption, or pushes permanently-excluded minorities to non-democratic alternatives.
Nagel attributes this success to several factors. Our system is - thanks to the electorate lifeboat, which acts as a correction on the 5% threshold - highly proportional. We have multiple minor parties, meaning multiple possible majorities. We have developed a culture of minority government, with ad-hoc coalitions on non-core legislation. And (despite National's efforts over NZ First) we have no "pariah" parties, which are a major cause of instability in both anti-MMP whipping-boys, (pre-Berlusconi) Italy and Israel.
As for the implications for the current review, Nagel thinks that our high degree of proportionality is crucial, and so recommends against removing the electorate lifeboat unless there is a significant reduction in the MMP threshold to 3%. Obviously I'd go lower (we shouldn't have a threshold, and then electorates would be irrelevant), but if there is to be a trade-off, it must be one which advances democracy rather than undermining it.
[Hat-tip: Bryce Edwards]