This chapter considers what institutional arrangements are appropriate in multiethnic states, to help bring about political inclusivity. Policymakers seeking to promote inclusive politics must take account the political and economic consequences of the policies chosen. It is not only a question of technically appropriate institutions. Institutional design is a political process shaped by the challenges of the ethnic structure of the society in question, the nature of inequalities between the groups, the historical pattern of the institutionalization of power, and the dominant culture of politics. Two of the most important targets of institutional re-design are the territorial division of the state and the rules governing political parties and electoral systems. The chapter explores what the expected outcomes of institutional re-design might be and draws our attention to the dilemmas and trade-offs implicit in the politics of inclusion. It concludes that regardless of what formal and informal rules are adopted in any country, the over-riding principle should be the attainment of institutional and political ends which make for inclusive politics and harmonious inter-ethnic relations.