Why do states sometimes use informal institutions instead of formal organizations to govern global policy issues? Extant research on the forms of institutionalization in global governance focuses on formal modes of cooperation, such as international organizations (IOs) and treaties. Formal rules, however, do not exhaust the institutional variety of international cooperation. They are often inadequate, if not entirely misleading, descriptions of the game that actors play in world politics. Recent work on informal governance largely focuses on informal governance within formal IOs. Little is known about informal governance outside formal IOs and how states choose between formal and informal institutional structures to govern global policy issues. This paper starts to address this research gap. We argue that in addition to international factors states’ choice of the institutional forms of global governance is also driven by forces at the domestic level. Specifically, we argue that the extent to which a state chooses to participate in a formal versus an informal international institution depends on its domestic regime type. The added value of the flexibility and low legal rigidity of informal institutions allows democratic leaders to avoid often cumbersome domestic ratification processes of international agreements and to bypass domestic veto players with opposing preferences. These benefits of informal governance are less pronounced in autocratic regimes. We, therefore, hypothesize that democracies are more likely to participate in informal international institutions than autocracies. We also expect that democracies are more likely to be the initiator of informal international cooperation. We empirically explore our argument using statistical analysis and a newly built dataset on international cooperation that contains about 500 cases of formal and informal international institutions.
