In this thesis, I examine the importance of ideas in causing institutional change in the political economy of Germany through government commissions. In doing so, the thesis addresses an important issue in the political science literature on institutions, namely to explain how transformative institutional change is possible in an institutional system that favours incremental change along a well-circumscribed institutional path. While institutional theorists have become adept at explaining institutional reproduction and stability, they find it difficult to conceptualise empirical instances of rapid institutional change. The purpose of this thesis is to provide a coherent theoretical explanation of transfonnative as well as evolutionary institutional change with reference to the causal importance of the ideas actors hold and to test this explanation with two detailed case studies. The case studies have been drawn from two instances of institutional change in the political economy of Germany between 1998 and 2005. Germany provides a particularly relevant test case as scholars, particularly proponents of the Varieties of Capitalism framework, have stressed the stability of the institutions of its political economy, arguing that they support distinct production regimes and generate comparative advantage that economic actors will want to preserve. This research found that the extent of institutional change depends on the commonality and specificity of the ideas embraced by actors. The more specific and the more widely shared the D , ( 4 new ideas, the more transformative the change in the political economy. I show that government commissions play an important role in institutional change by allowing actors to embrace new ideas and engage in problem-solving beyond their traditional interests, while legitimising their proposals. The case of the Bruhl Commission is an example of how a high level of commonality of new ideas led the commission to make recommendations that eventually amounted to transformative institutional change in Germany, i.e. the dissolution O"f1:iie 'Deutschland AG' or the network of interlocking cross-shareholdings of German films considered to be one of the founding pillars of Germany's political economy. The case study of the Hartz Commission shows how a lack of commonality of ideas among members of the commission resulted in recommendations that had a limited impact on changing unemployment protection in Germany and amounted to evolutionary institutional change.