The domestic scandal forces King Alexander to grant a more liberal constitution (1901) and to create a senate as the second house in the Serbian legislature.

During his reign he also improves his state's economy, reforms the army, and tries to improve Serbia's international position by encouraging the revival of the Balkan alliances that were originally negotiated between 1865 and 1868 by King Michael (Mihailo Obrenovic; reigned 1860–68).

Meanwhile, Dragutin Dimitrijevic, a young army officer and already a member of the Serbian general staff, in 1901 initiates an officers' conspiracy to assassinate the unpopular king.