While providing a useful framework for understanding short-term market dynamics, neo-classical economics does not provide sufficient guidance as to how to organize the electricity industry in developing countries, as it abstracts from issues such as institutional capability and stability and transaction costs. The theory of New Institutional Economics provides a better general framework for addressing this problem, but has not been developed sufficiently yet. For providing explanatory power, the theory needs to be extended to mixed public-private systems and, in particular, network sectors in which part of the value chain is a monopoly. Moreover, technical understanding of the electricity infrastructure needs to be incorporated in order to sufficiently appreciate the complexity of the electricity infrastructure. The intention for this project is to improve upon this framework so that it can be operationalized to better reflect the specific nature of a network industry such as the electricity sector.