One of the most significant urban phenomena in Serbia over the past thirty years has been the rapid and widespread growth of illegal housing building. It is widely believed that the socialist housing policy of the 1970s and 1980s is the main rationale behind illegal building in Belgrade in the 1990s. Although the policy resulted in a housing shortage and consequently initiated illegal building, the author will argue that changing socio-economic and political conditions during the transitional period in Serbia created a new set of reasons for illegal building. The thesis explores how the new political elite used an opportunity for profit making by manipulating the housing shortage and exercising control of state owned land through their informal and formal links. The case study of Dedinje, the most privileged area in Belgrade, illustrates how the political elite, including former president Slobodan Milosevic and individuals close to his regime, were breaking the rules and building illegal villas and office buildings. The second case study focuses on the Zemun council, run by another political party, and analyses how the law was ignored, and illegal building allowed as means for collecting political favours. Finally, a brief analysis of kiosk building across the other municipalities, run by the other political parties proves the same relationship between corruption and informal linkages. This discussion is advanced through a framework of new institutionalism; specifically the thesis is built around an argument for the importance of informal institutions, especially in a corrupt society.
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