This book analyzes the theoretical foundations of public sector modernization with special reference to transitional societies. Surveying international standards of governance and civil society in comparative perspective, this book applies rational choice theory to problems of institutional redesign in transitional societies. The book incorporates neoclassical and neo-institutional approaches to principles of implementation, with reference both to market and non-market situations. The theoretical framework of analysis is applied to practical problems of privatization and to post-privatization redesign of natural monopolies and social service delivery systems. The book was prepared for specialists in the field of public administration and public sector modernization.