This article revisits and seeks to challenge one of the most powerful hypotheses in the political economy scholarship: the supposedly negative relationship between ethnic diversity and public goods provision. We suggest that the relative lack of attention to politics and history makes much of this literature vulnerable to endogeneity problems. In response, we develop a state-centered approach that brings time and temporality to the analytical foreground. This approach addresses issues of reverse causality and spuriousness by examining how different historical trajectories of nation-state formation, and the state strategies and capabilities to provide public goods associated with each, might have shaped both contemporary diversity and public goods provision. Bringing in politics and history and putting the analytical focus on the state also allows the article to open up the debate around how distinct manifestations of politicized ethnicity might influence state provision of public goods.