Illegal Development in a State Controlled Economy in transition: the case of Montenegro

Montenegro, a state controlled economy in transition, is a country of special natural beauty that is also recognized by its Constitution as an “ecological” country. The paper presents the results of a research on informal development in Montenegro. It investigates the causes, the types and the extent of informal development and investigates the situation and the applied policies in 4 municipalities of varying social issues and economic growth. It identifies the remaining problems, reviews the practices and the applied policies of the state controlled economy, and gives proposals for the fast integration of informal development in the national economy, based on the current international trends and taking into consideration the challenges of the region.The methodology followed includes: (a) on site visits in four case study areas of [1] the greater area of the capital city of Podgorica, [2] the coastal town of Bar, and two mountainous municipalities of [3] Bjelo Polje, and [4] Zabljak; (b) interviews with UNDP, governmental agencies, Ministries of Agriculture, Planning, the Cadastral agency, NGOs, and municipalities, the private sector (surveyors, lawyers, planners, real estate agents, constructors, bankers, etc), and informal building occupants; (c) internet research; (d) review of existing literature on the topic; and, (e) review of the relevant Montenegrin legislation