The results of the parliamentary election in 1993 were the closest of the 20th century. The initial outcome was a hung Parliament, with no party holding an outright majority. Recounts of votes in marginal electorates allowed the National Party, led by Bolger, to emerge with 50 seats, a 1-seat majority in Parliament. Soon after the narrow defeat of the Labour Party in the 1993 elections, Helen Clark replaced Moore as party leader, becoming the first woman to head a major political party in New Zealand.
Also in the 1993 elections, a national referendum was held on whether New Zealand should retain its majority-vote electoral system or replace it with a system of proportional representation, known as the mixed-member proportional (MMP) system. The MMP system was seen as a way to limit the dominance of the two largest parties, Labour and National, by making it more difficult for either party to win a simple majority, forcing them to form coalitions with smaller parties. By a slim margin, voters approved the new system to go into effect with the 1996 elections.
The first elections under MMP returned Bolger and the National Party to power in a coalition with the New Zealand First party. A challenge from Jenny Shipley, former minister of social welfare, forced Bolger to resign as prime minister and head of the National Party in 1997. Shipley replaced him in November of that year, becoming New Zealand’s first female prime minister. In the 1999 legislative elections voters, weary of economic restructuring, ended nine years of National Party rule by voting in a center-left coalition led by the Labour Party. Labour was led by Helen Clark, who became New Zealand’s first female prime minister to be selected following parliamentary elections.