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Informal Institutions and Global Trade: Real Effects of the Elusive

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  • Eiji Fujii

Abstract

Countries routinely participate in intergovernmental forums such as the G7, G20, BRICS, and MIKTA. These informal institutions—unlike formal bodies such as the EU and WTO—lack permanent administrative structures, operate through rotating presidencies, and do not issue legally binding commitments. Although often overlooked as drivers of global trade, their formation and evolution embody underlying structural shifts in the world economy. Using data for over 200 countries spanning 1994-2023, this study introduces informal institutions as a distinct determinant of trade within the gravity framework. We find that BRICS exerts trade-facilitating effects comparable to those of formal agreements such as regional trade agreements and WTO accession. This highlights a novel channel of international integration beyond legal commitments.

Suggested Citation

  • Eiji Fujii, 2025. "Informal Institutions and Global Trade: Real Effects of the Elusive," CESifo Working Paper Series 12268, CESifo.
    • Handle: RePEc:ces:ceswps:_12268
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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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