A proper understanding of party system change demands a dynamic theory of party competition. This should integrate accounts of competition in the legislative party system, in particular coalition formation, with accounts of competition in the electoral party system, in particular vote maximization. Some of the implications of integrating the two facets of party competition are explored, with special attention to endogeneous changes in party systems produced as part of the process of competition. Such changes may operate in different directions in different parts of the system and the consequent damping effect may contribute to the relative stability of party systems.