Performance and Coherence in Network Industries

Network industries, such as electricity, railways and air transport, are very complex technical, economic, and political systems in which the interplay of technology and institutions has a significant impact on performance. While the performance of the network industries has always been relevant in one way or another (e.g., affordability and reliability of the service), the definition of performance has changed with the process of liberalization and has become more and more focused on economic efficiency. This paper argues that the targeted performance objectives (e.g., technical, operational, social, economic and/or environmental) have to be defined beforehand; only then can technology and institutions be aligned so that a certain coherence between them leads to the targeted performance (based on the "coherence framework"). This paper aims to further define performance in the network industries as well as to further substantiate the coherence framework between institutions and technologies. The methodology is based on case studies in different network industries.