This paper identifies the major political and economic constraints that impact the demand side of electricity industry restructuring processes. Demand-side constraints have been a major barrier to implementing effective restructuring processes in many countries, particularly those in developing world. I describe how these constraints have been addressed and how this has harmed market efficiency and system reliability using examples from restructuring processes throughout world. I propose demand-side regulatory interventions to manage these constraints in a manner that limits the harm to wholesale market efficiency. Finally, specific regulatory inventions for developing countries such as India are proposed.