On many measures of ethno-linguistic diversity, Papua New Guinea is the most fragmented society in the world. I argue that the macro-level political effect of this diversity has been to reduce, rather than increase, the impact of ethnic conflict on the state. Outside the Bougainville conflict, and (to a lesser extent) the recent upsurge of violence in the Southern Highlands, ethnic conflicts in Papua New Guinea have not presented a threat to national government. In contrast to most other ethnically diverse societies, the most consequential impacts of ethnic conflict in Papua New Guinea are at the local level. This paper therefore examines the disparate impacts of local- and national-level forms of ethnic conflict in Papua New Guinea.