American politics is often understood as the hegemony of two parties. My dissertation tackles this central institutional relationship between state political institutions and political par- ties. I focus on how major parties at the state level have deterred new political parties. Specifically, I examine how electoral laws discourage the formation of parties, shaping state legislative-level electoral competition and ideology.The first chapter examines the consequences of laws making it difficult for non-major party candidates to run for office. I demonstrate that when states adopt restrictive ballot access laws increasing the costs of minor candidates, these party outsiders run in major party primaries instead. Increasing primary competition by extremist and moderate, minor candidates leads to more heterogenous and less unified party caucuses in a state legislature. The second chapter explores how minor parties use electoral threats to force ideological changes with major parties. Major parties make policy concessions when minor parties pose credible electoral threats. This occurs when a minor party candidate spoils or nearly spoils an election, receiving more votes than the margin of victory for an ideologically aligned major party. In contrast, third parties fielding candidates who do not spoil elections do not pose an immediate threat to the Democratic or Republican Party. Spoilage changes whom a major party nominates for office, roll call vote behavior, and aggregate caucus behavior. The final chapter studies how New York’s fusion voting system influences the party loyalty of legislators. Fusion voting allows candidates to run under multiple parties, with all the votes they receive from those parties being fused together to calculate their total vote. I theorize that most legislators do not know if their electoral success is because of the party vote or personal vote. Whereas fusion voting allows them to disentangle this vote, learning and adapting from the informative signal voters send when choosing which party to vote for their representative. Legislators moderate their behavior when perceiving their vote as personal while becoming more partisan when their success depends on their primary party. Overall, my dissertation emphasizes the role played by electoral institutions in shaping legislative and party behavior.