Shock-Absorbers Under Stress: Parapublic Institutions and the Double Challenges of German Unificationand European integration.

The paper focuses on a specific category of institutions that are, it has been suggested, characteristic of Germany?s ?semisovereign state?, namely ?parapublic institutions?. Parapublic institutions are a heterogeneous group, united by the fact that they bridge the gap between the public and private sectors, and that they carry out important policy functions. Furthermore, they combine a high degree of autonomy in policy making (under a general supervision of the government, which rules out interfering in details), with a high level of expertise. The paper asks how these institutions have coped with the double challenges of German unification and European integration over the 15 years since Katzenstein?s original analysis. Three detailed case studies of parapublic institutions that have been centrally affected by these changes form the core of the paper: they are the Treuhandanstalt (the agency charged with the task of privatisation of the East German state-owned economy), the Bundesbank (the central bank that lost many of its former tasks to the European Central Bank) and the Federal Employment Office (which was challenged substantially after a policy scandal in 2002). The case studies form the basis for assessing the performance of parapublic institutions in a changing environment and help to answer the question whether they can still fulfil their function as ?shockabsorbers? in the political system. [ABSTRACT FROM AUTHOR]