This paper investigates the relationship between socioeconomic horizontal inequalities (inequalities between identity groups), regime type, political institutions, and civil conflict onset. A positive link between horizontal inequalities and violent conflict has been established by some preliminary empirical studies (e.g. Østby, 2005a,b), but no systematic large-N study has to date investigated whether and how the political environment can affect this relationship. I argue that one should expect the relationship between horizontal inequalities and conflict to be contingent on regime type and level of political inclusiveness. Using Demographic and Health Surveys (DHS) from 61 developing countries in the period 1986–2003, I calculate welfare inequalities between ethnic, religious, and regional groups based on indicators such as household assets and educational levels. These inequality measures are then interacted with terms for regime type; political inclusiveness (operationalized as electoral system), and political exclusion of minority groups. The results show that the conflict potential of horizontal inequalities is stronger for democracies and semi-democracies than for autocracies. Institutional arrangements also seem to matter. The positive effect of socioeconomic horizontal inequalities on civil war increases with increased levels of political inclusiveness. There is no interaction effect between socioeconomic horizontal inequalities at the mass level and political horizontal inequalities at the elite level, although the terms have separate and additive positive effects on conflict outbreak. In sum, what seems to be required in order to secure peace in plural societies is the combination of politically and economically inclusive government.