This article analyzes the construction of 'civil society' in Serbia as a development project in itself within the wider democracy assistance frame targeting post-communist countries. The goal is to problematize universal templates used for the creation of a politically neutral NGO sector and to document the new social realities created locally by their direct intervention in everyday life. The introduction of the 'NGO model' of civic engagement has created a new space for existing and new local elites to consolidate their position while at the same time it has served as an incubator for political leadership. In parallel, ethnographic data can shed light on the dynamic of multilayer power relations between donors, NGOs, and state institutions competing over a state-building project. Both NGOs and state institutions, far from being passive recipients of developmental aid, deploy their own flexible strategies in order to negotiate and re-appropriate donors' directions of good governance and New Public Governance. At the same time, more sophisticated, bottom-up democratization approaches are contested by local constructions of power and legitimacy, calling thus into question the highly technical and moral character attributed to democracy itself by its promoters.