Abstract Short of partition, many scholars hold that consociational arrangements are the most effective democratic institutional mechanisms to manage ethnic differences and maintain peace in nations and groups recently engaged in violent ethnic conflict. Many countries have implemented consociational arrangements to redress identity-based conflicts over recognition and resources, but the empirical record is mixed at best. Restoring moderate politics and democratic order in ethnically divided societies after war is difficult. Consociationalism, however, is usually not the best or the only option. Consociationalism fails as a viable post-conflict political system, we argue, because it tends to reinforce centrifugal politics and to reify identity-based cleavages. The implementation of centripetal social and institutional reforms, which foster political and economic incentives for communities to reintegrate refugees, diversify existing populations, and engage in coalition politics, is more likely to restore moderation and minimize the risk of renewed ethnic violence. We explore these arguments using the critical case of Bosnia, drawing on examples from other parts of the world that have faced similar challenges. We argue that efforts to balance majority rule and the rights of the constituent peoples in Bosnia have created an unwieldy power-sharing architecture that satisfies none of the parties and is unable to govern. Post-war and deeply divided democracies, such as Bosnia, require reforms that move towards a centripetal, incentives-based approach to institutional design.