Why do immigrant groups, historical national minorities, and indigenous people participate more, and have representation in elected bodies to a higher degree, in some democracies than in others? This paper conceptualizes a new variety of multicultural democracy (MCD) as a regime characterized by four core characteristics beyond the basic requirements of electoral democracy (polyarchy): 1) institutionalized mechanisms for a shared sense of one political community; 2) a high respect for and inclusion of cultural plurality; 3) secure individual liberties and protected rights of group difference; 4) participatory institutions allowing citizens to conjoin to solve common problems. The paper details and justifies this conceptualization of MCD and then addresses how to go about to measure it presenting a novel MCD index with global coverage and time series based on expert-coded indicators developed by the Varieties of Democracy (V-DEM) project and other data sources. Additionally, it demonstrates theoretically and empirically how levels of economic development, income inequality, colonial heritage, societal fractionalization, and mass political culture relate to MCD.