It has been argued that the current scholarship on ethnicity is focused on the rise of ethnonationalism, without incorporating the possibility and the nature of decline in its scope and intensity. An absolute majority of such movements have indeeded been contained in the postwar era. There is no reason to believe that this trend will reverse in near future. In this context, one can point to Pakistan, Baloch and Sindhi nationalist movements within Pakistan. Our discussion of the rise of the mohajir movement in this paper provides clear indicators of the potential determinants of its decline. It is significant that it is the state at the non-policy level which created a situation of ethnic explosion in urban Sindh. Various macro-level explosive issues revolving around conflicts between politicians and army, federalist and provincial forces, Islamist and secularist elements and, externally, India and Pakistan seriously circumscribed the state’s capacity and will to persue micro-level issues such as urban planning educational and manpower strategies, rural-urban and inter provincial migration and investment in mental infrastructure in general. The abdication of policy by the state rendered it inactive and irrelevent. This ‘residual’ state was represented by officials at the bottom level who controlled a vast number of transactional activities outside the purview of law. Ethnicity emerged as the new source of definition and categorisation of interests and identity formation as the state defaulted on various counts such as citizen orientations, legal protection and security of life and property. In other words, it was not too much of the (Jacobin) state, as primordialists would have us believe, but rather too little of it which produced the mohajir ethnic consciousness. We can maintain that the process of nativisation of mohajir is the product of multiple locational and transactional activities which do not necessarily reflect state policies.