This works just like in the business world, where competition by firms to grab a slice of the market share translates to superior customer value, and we all know the effects of duopoly and monopolistic competition.
After 1992, Kenya went through a monopolistic competition, where KANU faced a fragmented opposition in parliament. Devoid of prior experience this was also a period for the opposition to learn what being an 'opposition party' really meant. Even after the repealing of section 2A of the constitution, the national mindset of what an opposition party meant was still evolving.
In fact up till this day most Kenyan MPs seem to have only the vaguest idea not only of what it means to be a an opposition MP but also what it means to be a law maker (MP). Not even cabinet ministers exhibit a full understanding of their job description and the required conduct of themselves in the House.
We have heard for example, MPs' complaints about what the government needs to do about corruption. Complaints from MPs who themselves have the power to legislate have not been pro-active in for example empowering the KACC or reducing presidential influence in the appointment and dismissal of judges; which are some of the key pillars in the fight against graft. So far too often, the MP seems to see himself as a helpless bystander, the perception being that only those in the very heart of government can do anything to cause change in the country.
Back to the post-1992 scenario. KANU operated for 10 years as a monopoly of policy development with little input if any from the opposition. This was so because much of the opposition couldn't speak with one voice in parliament since there was no ideological glue binding them. It was also reinforced by the fact that many of the opposition MPs only thought of themselves as having the capability to serve Kenyans when they formed the next government and not before. This led to a less proactive nature in policy formulations by the opposition parties of that time.
Currently as it stands out KANU wouldn't have played that role either and we might have ended up with a return to the policy monopoly of NARC. However, as a result of the dishonored MOU and the return to the opposition of the LDP arm of the ruling coalition, KANU has had an education on the role of an opposition mp.
NARC's ascension to power has thus started Kenyans on a long learning curve towards the adoption of a culture of issue-oriented politics, which for sure has been gaining momentum; Issue such as free health insurance, 10% economic growth, a presidency with diminished powers  (a consequence of the 2005 referendum) have all started to gain a place in the national psyche. The politics of hand-outs and 'eating' are being relegated to the periphery of the political sphere, albeit at a slow pace.
The growth in importance to Kenyans of these issues, as well as a media that is less servile to the whims of government is what shapes a democracy. The competition for the public imagination and the subsequent delivery of services then translates to good governance not just in the serving government but in successive governments as well. No government would encourage the waste of public resources in trying to offer value to a Kenyan taxpayer who is both well informed about its promises and capable of voting it out if the opposing side has better articulated alternative policies. In other words, the teachers' salaries deal now coming into fruition, the free-primary schooling now being offered by the NARC regime can only go on with prudent management of resources. i.e. optimized tax collection and optimized utilization of the collected tax. This would mean fighting corruption by default to ensure those resources are used to make Kenyans happy through the value of well paid civil servants or free-primary education.
Clearly a refutation of the old proverb about two elephants fighting. As the NARC-K and ODM-K behemoths jostle for the limelight and public approval, each fully aware that the slightest misstep could be punished by their large and powerful rival, the grass is singing.
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I disagree with Peter's initial statement, but it is certainly a good challenge for thought. Two-party systems have proven to be noxious and very detrimental to the common good, be it in the United Kingdom, be it in the USA. They are actually an adversary of true democracy.
I can see and respect Peter's concern; a concern of factionism and chameleonic loyalty-changing (like Gado just wonderfully drew it). Indeed, Kenyan needs not "Italian conditions". The Italian export of her politics to East Africa from 1935-1942 was enough, one could say ;-). But there are far more other countries that show that a multi-party system can be stable and working.
As to the Parliament not living up to its primary duty of being a law-maker, Peter is right of course. Bunge does not have the extensive and expensive apparatus that would support MPs in this duty, as is common in democracies in the Global North. Okay, the Attorney General's office does not have such personnel either (their entire legal drafting section is the shame and laughing stock of Africa), but that's another problem.
I would urge everybody to have an actual look at the Hansard, to see and check what her parliament is doing for her. Recently (after much incessant ass-kicking by the indefatigable Mzalendo crew), Bunge gots its act together and presented a really informative website. And they have almost one year of Hansard online. Read it. Read it!
Once you have carefully perused it, you'll have a much better and fairer image of your MPs. There still is much shadow, but also some light. And you can see the glaring and overwhelming weaknesses of the Westminster system much better once you have read through a few days of debates; notably the numerous dysfunctional Standing Orders which make the whole parliament a travesty of itself, and fairly useless for anything substantial. When will they change these?