Suggestive of an internal homogeneity and exclusivity based upon share of the vote, governing potential and access to state subventions, the party system component of the cartel argument identified a select body or group of parties. Although more likely to form in systems characterised by politics of co-operation and accommodation (Katz and Mair, 1995: 17) as the developments from which the cartel reaction arose were not discriminatory, the effect was universal, as was the response. Manifestations of cartels (MacIvor, 1996; Young, 1998; Detterbeck, 2001; Pedersen, 2001) and cartel parties (Detterbeck, 2001: Pedersen, 2001: Hopkin, 2003) have not been homogenous and both Kitschelt (2000) and Yishae (2001) suggest that parties and party systems have moved on from the cartel type and entered a phase whereby they have begun to respond to and incorporate the needs of the electorate. In the sense that there is never ‘ a single evolutionary model’ and the cartel is an ‘available repertoire, or menu, from which political actors may draw’, the cartel thesis is ‘an important development in the on-going evolution of party politics’ (Katz and Mair, 1995: 532). By drawing attention to these developments, the thesis highlights a group of parties which preceded and will outlive the cartel: contenders for government. Adopting a reductionist view of the cartel which allows for the variation and developments that may invalidate a strict interpretation of the thesis, this group of parties can be isolated from the more ephemeral organisations within the parliamentary arena.
Common to the majority of party systems in the last thirty years has been the penetration of the cartel by challenger parties. An amorphous and organic entity, the cartel is not a rigid structure but a product of its environment and therefore its constituents are an indication of the wider developments occurring within politics. Accordingly, parties which had hitherto been excluded from the cartel on the basis of ideological and behavioural tactics incongruent with established politics began to raise their electoral profile at precisely the same time that traditional parties found their position under threat (Merkl, 1988: 562; Luther and Müller-Rommel, 2003: 7) to such an extent that they had no option but to consider their incorporation into the cartel, and reevaluate the terms of entry and membership.
The division between parties suitable and not suitable for government was (generally) always clear in the past, the ideological divide accepted, and the norms of competition and behaviour understood. Electorally successful anti-system parties operated on the absolute fringes of the system and were not responsible contenders for government, circumstances necessitating their inclusion, saw them constrained, but in most instances they were excluded. Governmental potential was equated with evidence of political legitimacy and assessed by systemic effect (Sartori, 1976: 57; Abedi, 2002: 555; Cappocia, 2002) and level of support for the ‘existing socio-economic order’ (Smith, 1987: 54).  To be considered legitimate an organisation needed to suggest an ability to provide or contribute to consistent and accountable government, and or opposition. Inability to display this relegated it to pariah status, prevented the achievement of coalition potential and left it reliant upon on blackmail potential in parliament (Sartori, 1976: 123). The decline of traditional cleavages provided parties outside the cartel with an opportunity to infiltrate it, blurring the distinction between responsible and irresponsible organisations in the sense that the latter secured access (albeit tenuous) to elite politics. Most notably this resulted in ‘a marked increase in the promiscuity of coalition formation, with almost all possible combinations of parties being conceivable in both theory and practice’ (Katz and Mair, 1996: 530). But, to what extent have these non-traditional parties been incorporated into the mainstream and do they enjoy the same goods as potentially governing parties from more traditional and perhaps respectable backgrounds? In other words, to what extent have the challenger parties which have passed the thresholds of representation and relevance (Pedersen, 1982) become members of the established political class? These questions highlight the need to understand the internal dynamics of the cartel.
The cartel is the resource from which government is drawn, it is a new arena for encounters between government and opposition, yet, terms of membership differ from those of parliament, and the ground rules of behaviour operate to different criteria. Based upon the power differential between parties which lead and support governments, the cartel initially developed as a two tier structure. The first layer comprised parties articulating established cleavages, dating back, in either their present or past form, to the freezing of party system alternatives in the 1920s (Lipset and Rokkan, 1967). With experience of government, having contributed to and actively maintaining the political process and democratic infrastructure, they could be termed as ‘prosystem parties... [which]... do not challenge democracy or have any polarising effect on the party system mechanics’ (Cappocia, 2002: 26). With the instigation of cartel norms inter-party competition within the this layer diminished so that all organisations began to share a relatively equal governing potential. These parties formed the core of the party system (Smith, 1989). 
The second layer comprised smaller parties whose role was mixed and contingent upon their environment . As hinge (moderate multiparty system), third party (two and a half or three party system) or as small parties banded together on either the left or right of the system (polarised multi-party system), they exhibited varying degrees of responsibility, power and influence both in and out of office, hinge and third parties, being an integral component of the party system ‘core’ in their traditional pro-system status and possession of blackmail and coalition potential.
Parties in the upper two tiers of the cartel worked together to maintain their position which necessitated minimising electoral volatility to an acceptable level and maintaining a satisfactory equilibrium of governmental access between them (see Katz and Mair, 1995). This involved a level of collusion and nest-feathering on the part of established parties, to maintain cartel barriers and prevent outsider access where possible (see Katz and Mair, 1995). However, the electoral success of challenger parties in recent years has necessitated an extension of cartel boundaries and provision of a third tier for organisations displaying goals which are, on the face of it, incongruent with the political norms of most party systems. Kitschelt (2000) suggests that challenger entry to the cartel is contingent upon three achievements: successful appeal to and mobilisation of new electoral groups, effective strategies which thwart the cartel’s attempts to isolate and exclude them, and the successful overcoming of electoral, financial and publicity barriers (Kitschelt, 2000: 170-174). These qualities however, are the criteria for entrance only, they do not protect a party from either exclusion or co-option on the basis of their personal characteristics. New parties must conform to the requirements of established and traditional politics if they seek accommodation into the cartel and consideration for membership of the second layer , those which do not will be excluded, and those which are tolerable are co-opted, but afforded little influence and ostracised where legally possible (see Katz and Mair, 1996: 531).