“Do institutions matter?” This question has been important to the study of political science, in recent years especially to the study of the relation between political behavior and its outcomes. Most scholars tend to regard the institutional organization and practice as influential factors directly relevant to the operation of the electoral system as well as that of the party system. To clarify this general presupposition, this paper focuses on the linkage between “individual choice” and “institutional design” and adopts a “cross-level analysis” to examine the relationship between institutional choices of the electoral system and the formation of different types of party system. Moreover, this paper attempts to show that different kinds of electoral systems will lead to distinctive outcomes, which could influence the formation of the party system as well as individual voting behavior. To demonstrate the influences of the electoral system exerted on the individual decision, this paper further explores how the “mechanical factor” regulated by the electoral system constrains the “psychological factor” of the voter’s mind and eventually leads to the so-called “strategic voting” or “complex voting.” In addition, to infer possible reasons for the influences of the electoral system on the party system, this paper employs the number of valid parties as an indicator of the fragmentation of the party system. This number is the analytical result of the empirical data from Taiwan Presidential Election, County Magistrate and Mayoral Election, Legislator Election, and Missionary National Assembly Representative Election. The effective number of parties is utilized to analyze the electoral results of three electoral systems—plurality with single-member-district system, single non-transferable vote, and proportional representation. Through the analysis, this paper intends to show that these three electoral systems do respectively lead to quite different consequences in the distinctive forms of the district-level and the national-level party system.