With September's election on the horizon, the system's more controversial characteristics are fuelling debate.
Many maintain that MMP is the only truly democratic way to represent a population, while critics say it gives minor parties disproportionate power and influence, putting politics before people.
So who's right?
How it works
MMP gives voters two votes - one for their preferred political party, and the other for the MP they want to represent their electorate.
Parties have to get a minimum of 5 per cent of the vote or win at least one electorate seat to get its share of seats in Parliament.
Parties rarely win enough votes to govern alone, and coalitions have become a common feature of New Zealand governments since the electoral change was brought in.
The result is a Parliament in which a party's share of seats largely reflects its proportion of the national vote.
Until MMP was voted in in 1993, Kiwis had one vote under FPP - a system where candidates with the most votes won, regardless of whether they had 50 per cent.
Major parties tended to win a larger proportion of Parliamentary seats than their share of votes, while smaller parties were largely sidelined.
Electoral shakeup
Voices for electoral reform began to stir in the 1950s when public confidence in politicians and the two-party system began to erode.
Over the following decades, economic uncertainty and social upheaval helped give traction to the idea that Kiwis weren't being accurately represented.
Despite winning decent chunks of the vote, many smaller parties were being excluded from Parliament altogether, causing significant voter disillusionment.
Canterbury University political science lecturer Dr Bronwyn Hayward says many people felt FPP unfairly inflated the vote of some parties.
"For example in 1978 and 1981 Labour actually won more votes, but National still won the election."
Other concerns played an equal hand in the push for change.
There was no way to hold MPs to account once they were elected, prompting calls for a system in which people had more of a voice, Dr Hayward says.
In 1993 Kiwis voted in a referendum to change the voting system to MMP - marking the country's biggest electoral change since women got the vote.
The overhaul intended to give parties representation that was proportionate to their overall vote, and to give a voice to smaller parties and minorities.
But it hasn't all been plain sailing, and the looming election is bringing some of the biggest gripes about MMP to the forefront.
Perceived failures
One major complaint is the merits of the "coat-tailing" provision, which allows smaller parties that haven't met the 5 per cent threshold to bring MPs into Parliament on the "coat-tails" of an MP who has won an electorate seat.
The clause also permits larger parties to forge deals to help smaller parties over the line, like National's deal with ACT in Auckland's Epsom seat in 2011.
Following a 2011 referendum on MMP, which saw it retained, the Electoral Commission called for the coat-tailing clause to be thrown out. "The one electorate seat threshold ... runs counter to some of the most fundamental principles of the MMP voting system, including that all votes should be of equal value, the primacy of the party vote in determining election outcomes, and fairness of results," the commission said at the time.
The electorate vote could be used to "significantly influence" the make-up of Parliament by bringing in list MPs who would not otherwise be elected, it said.
Another controversial feature is the provision known as "waka-jumping" - when a list MP is ejected from their own party but can remain in Parliament, collecting their salary despite no one having voted for them.
A diverse community
Political science lecturer at Canterbury University Lindsey MacDonald says MMP made Parliament look much more like New Zealand, but this has had a double effect.
"It makes clear that we are a diverse community with multiple views on any subject and that in order to knit together a solution, everybody has to be included.
"But it's also raised and put in front of us that we're much more diverse than we're realistically comfortable with.
"MMP really shoves in our faces that politics is how we sort things. You have to have politics and you have to work with everybody."
Put to the people
While New Zealanders voted to keep the system, the referendum review included a number of recommendations on how the system could be improved.
These have been largely ignored by the Government.
Accountability
'Vote for Change' lobbied against MMP and its former spokesman and constitutional lawyer Jordan Williams still says the fundamental flaw is a lack of accountability.
"Every system has its flaws but at least politicians think, 'I better do what the voters want otherwise I'll lose my seat'. The trouble with MMP is too often it's, 'I have to do what my party wants otherwise I'll get a low list position and lose my seat'."
