Under what conditions does coethnicity undermine mutually beneficial collective action? One of the most enduring hypotheses in a comparative political economy decade is that ethnic diversity tends to undermine public goods provision. Ethnically homogenous communities are assumed to have a distinct advantage in local goods provision because shared identities tend to facilitate cooperation among coethnics. However, one can observe variation in the success of local goods provision across homogenous communities. To explain this puzzling occurrence, I explore the relationship between coethnicity and social capital, examining how they interact differently in different contexts. Empirically, I conduct an analysis of my own fieldwork on community policing efforts in two ethnically homogenous communities in Cape Town, South Africa. Ultimately, the paper demonstrates that, in some contexts, coethnicity facilitates the development of bonding social capital, a type of social capital that constricts opportunities for individual action by creating certain expectations about behavior. In the context of community policing, those expectations can discourage individuals from participating in collective efforts.