In the face of common threats, why do some vulnerable communities develop institutions that advance their collective interests and security while others fail? Through a comparative analysis of slum communities in urban India, my dissertation will explain how community governance institutions take shape in contexts of ethnic diversity and patronage politics—conditions that describe many cities in the developing world. Two related puzzles motivate my research. First, the level of basic public goods and services—access to drinking water, sanitation and waste removal, public safety, and schools—varies widely across and within slums in India. What causes these developmental disparities? Second, urban slums are among the most densely populated and ethnically diverse areas in India. Slums diverge, though, in their levels of inter-ethnic cooperation and political organization. This complicates a growing and interdisciplinary literature that posits a negative relationship between ethnic diversity and cooperation. Drawing on variation in inter-ethnic organization across India’s slums, my research will illuminate the mechanisms that impede or facilitate collective action in socially heterogeneous groups. It will also provide insight into the origins and formation of informal political institutions. I propose a research design that combines the strengths of sustained qualitative fieldwork, formal theory, and a larger quantitative analysis.