VENICE -- The unsatisfying nature of last week's economic summit stems from basic deficiencies of this peculiar institution compounded by the fading vigor of the Reagan administration.

The Venice summit was neither the informal get-together that these conferences were originally supposed to be nor the policy conclave that the international news media have made them out to be. In fact, it was an expensive, ostentatious, boring parade of leaders who, with the exception of the triumphant Margaret Thatcher, probably have seen their best days politically.

That was regrettably true of President Reagan. While, as usual, the dominant summiteer, he had obviously declined since his first such meeting in Ottawa in 1981. His image as leader of an administration in its final months and out of gas fit into the overall irrelevance of Venice.

The summit's most productive accomplishment, taking a modest step toward economic coordination among the seven industrial democracies, was in fact decided weeks ago in private by the finance ministers. The announcement by the heads of government was a mere formality.

But those leaders could have advanced beyond what their Cabinet ministers had agreed upon. Instead, no economic controversy that might prove disagreeable was raised. The economic summit goes the medieval Polish Diet one better. If there is one serious objection, a proposal is not even debated, much less adopted.

West Germany would permit no teeth in the statement condemning farm subsidies. The Germans and British balked at policing economic coordination. The Germans and Japanese were not about to ratify all-out economic growth. So, nobody forced any issue.

But what about the heads of government talking over these questions informally, as originally intended, without trying for agreements? The problem is that when the leaders did talk in private, they hardly engaged the serious economic questions confronting the noncommunist world.

French President Francois Mitterrand, who has become dependably didactic and garrulous at these meetings, monopolized the time in a debate over free-market economics with Prime Minister Thatcher. Reagan stressed the American record of job creation and urged the Europeans to remove ''rigidities'' from their systems that hamstring employers. Mitterrand and Japanese Prime Minister Yasuhiro Nakasone delivered their obligatory annual complaints against American budget deficits.

Nobody could claim this desultory ''debate'' advanced the serious business of international economic reform. While Reagan is always eloquent declaiming the merits of the free market, his advisers wince when he ventures into the dangerous terrain of global economics.

The president almost inadvertently upset the clear intent of the G-7 finance ministers to guard against a further drop in the dollar. In his closing press conference, Reagan said absent-mindedly he thought the dollar might yet fall a bit more. The irrelevance of government leaders is demonstrated by the fact that currency markets practically ignored the president's statement.

The summit was no more productive on non-economic questions. The vanilla-flavored statement on ending the Iraq-Iran war and guaranteeing free navigation in the Persian Gulf was adopted after no debate and could have been opposed by no world leader this side of the Ayatollah Khomeini.

But if the summiteers would not act decisively, neither were any of them permitted to grandstand. Canadian Prime Minister Brian Mulroney, badly in need of a boost back home, was slapped down when he made the mistake of seeking a resolution denouncing South African apartheid.

The one moment of relevance in Venice might have come during the opening-night dinner. The seven leaders talked well past midnight, comparing impressions of Mikhail Gorbachev. How relevant their ideas were may never be known, for they dined without Cabinet members or personal aides present. But at the least, here were world leaders talking about serious matters without a predigested communique to be distributed to 3,000 members of the world news media gathered for their exercise in irrelevance.