Brian Gaines and Rein Taagepera have recently clarified how to measure two-partiness (or should that be two-partyness? It isn’t in my dictionary, so I went with the analogy with happiness, although both forms seem to be in use). They highlight that the effective number of parties (Neff) is inadequate as a measure of two-partiness: very different constellations can lead to similar values of Neff.
Interestingly, the suggest two distinct measures for measuring two-partiness (T, D2), and I have implemented them in my R package polrep, available on R-Forge. It’s probably worth reiterating at this point that Gaines and Taagepera do not suggest we stop using the effective number of parties in general, but that we use more appropriate measures if we’re interested in two-partiness.
Gaines, Brian J., and Rein Taagepera. 2013. “How to Operationalize Two-Partyness.” Journal of Elections, Public Opinion & Parties 0 (0): 1–18. doi:10.1080/17457289.2013.770398.