This dissertation deals with education systems and the change observed within them alongside changes in the wider political economy. The research is conducted by way of a comparative case study of England and Germany, two countries which in the Varieties of Capitalism (VoC) literature represent two very different types of economic coordination (thereby making the study conform to a 'most different research design'). Extending the VoC approach, not only vocational education and training but also school education and higher education are analysed, since these two areas contribute decisively to national skill formation. The point of departure is the puzzling fact that the current reforms of the education systems of both countries are departing from the paths predicted by the VoC approach. The thesis thus argues against institutional path-dependency in the two countries, and in favour of an ideational approach based on discursive institutionalism. First, the theoretical chapter (second chapter) of the thesis includes discussions of discursive institutionalism, policy diffusion, and conceptual mechanisms of institutional change, and provides a framework which accounts for path-deviant discourses and reforms. Secondly, a description of the three educational areas in both countries sketches the paths the systems should have pursued if they were to evolve path-dependently. Thereby this chapter serves as a reference point against which recent developments are assessed (fourth chapter). Thirdly, a textual discourse analysis of various White Papers of the British Government formulating policies on skill formation serves to identify visions and aims. The same procedure is applied for relevant policy papers in Germany (fifth chapter). Finally, the translation of visions into concrete policy measures is analysed by focusing on three important reform measures in each country (sixth chapter). On the basis of the policy cycle stages these measures are traced back to their original intentions and are contrasted with the implemented initiatives. This procedure elucidates how reforms match and potentially alter the existing institutional design, how ideas drive educational reforms, and how they resist, 'bend', or even vanish, once they are employed in concrete policy initiatives.