This article focuses on the core theory recently proposed by Putnam on the relationship between ethnic diversity and dimensions of social capital. Hypotheses are derived from this theory, but also from other theories that propose competing hypotheses on relationships between national characteristics and dimensions of social capital. Essentially, the authors propose more rigorous empirical tests of Putnam's hypotheses by including these competing hypotheses: tests of these hypotheses provide possibilities to evaluate Putnam's and these other theories in terms of general (i.e. cross-national) tenability for the European continent. The general question is: To what extent do national-level characteristics like ethnic diversity, next to other national characteristics, actually affect dimensions of social capital of individual citizens in European countries? The authors set out to answer this question by testing hypotheses on cross-national data from 28 European countries. These data contain valid measurements of a number of dimensions of social capital. The individual-level data are enriched with contextual- (i.e. national-) level characteristics to be included in more advanced multilevel analyses. The main finding is that Putnam's hypothesis on ethnic diversity must be refuted in European societies. Instead, it is found that economic inequality and the national history of continuous democracy in European societies turn out to be more important for explaining cross-national differences in social capital in Europe.