Privatising public utilities in many developing countries have been slow, uneven, and plagued by many obstacles. Drastic, technical, and unpredictable changes in the 'enabling environment' that affect the initiation and implementation of privatisation programmes are required. Therefore, it is significant to improve understanding of the institutional framework that formulates the essential links for public utility privatisation and regulatory govemance, with particular reference to institutional environment (economic, political, ideological, administrative, and legal perspectives). The purpose of the paper is to examine the institutional setting of privatisation with particular reference to developing countries by presenting a holistic interdisciplinary framework within which the institutional environment of public utility privatisation process can be better analysed. Moreover, this paper is argued that privatising public utilities is needed to be complemented by policies that promote competition and effective regulation when it is integrated into a broader process of structural reform.