You can't improve democracy through math.

Preferential voting increases the influence of extremists on both sides as their candidates shore up the construction of coalitions or provide the additional # of votes needed for large parties to achieve a decisive victory.

Coalition governments only bring about increased resentment towards governments as separate interests grow more disillusioned with their policy achievements (either too moderate or too extreme). Two parties allow for a clear mandate "this is the direction we go in, if you don't like it, vote for the other team".