Why have states recently started to use informal institutions instead of formal organisations to govern global policy issues? Extant research on the forms of institutionalisation in global governance focuses on formal modes of cooperation, such as intergovernmental organisations and treaties. Formal rules, however, do not exhaust the institutional variety of international and transnational cooperation. They are often inadequate descriptions of the game that actors play in world politics. Recent work in political science, economics, and international law has started to examine informal governance as a mode of international cooperation. Informal governance refers to unwritten – and often vaguely specified – rules and norms that are not enshrined in formally constituted organisations and which modify or substitute legally binding rules. This project examines the factors that lead states and transnational actors to choose between formal intergovernmental organisations, informal intergovernmental organisations and transnational governance networks to structure their interactions and govern global problems. The research team will also investigate the interactions between formal and informal institutions. The project highlights the political dimensions of informal governance and argues that distributional conflict and power asymmetries are critical for the selection and design of informal institutions. States and transnational actors use informal institutions as a means to project power and influence outcomes according to their particularistic interests. This project will fill an important gap in research on international cooperation and global governance by taking systematic account of the wider spectrum of institutional variation. Furthermore, the accurate knowledge about the factors that shape the emergence and functioning of informal forms of governing will help policy-makers to effectively provide public goods and enhance the legitimacy, equity, and efficiency of global governance institutions.