As leaders of the world's seven largest industrial democracies prepare to meet this weekend in Toronto, the most appropriate reaction to their annual economic summit is a polite ho-hum.

That's because, after 14 years of experience with it, the world has come to recognize that this annual exercise is considerably longer on promise than it is on performance.As a case in point, take some of the leading items on the agenda of this week's economic summit - the Third World debt crisis and agriculture subsidies.

If any economic problem cries out for an international, coordinated response by the major lending countries, it is the chronic inability of the poor nations to pay off their loans.

This problem has become so serious that France has gone to the extreme of, in effect, throwing up its hands in despair and canceling a third of the debt owed it by the countries of sub-Sahara Africa.

But France is having trouble persuading the U.S., Britain, Italy, West Germany, Japan, and Canada to go along - and for good reason. It's hard to cancel major debts without inviting other debtors to welch on their obligations and without making big banks more reluctant to extend new loans.

Then there's the farm subsidy problem. European farmers now get 49 percent of their income from government subsidies, Canadian farmers get 46 percent, and American farmers 35 percent. These payments have produced a glut of grain and other crops. No wonder President Reagan is calling for a global end to farm subsidies by the turn of the century.

The Reagan proposal, however, is getting nowhere - not because of its economics but for political reasons. It's hard for any of the summit members to cut back on subsidies without antagonizing farmers, who everywhere have more political clout than their numbers alone would warrant.

Consequently, the Toronto summit is expected to make little progress on these issues, just as its predecessors generally produced more headlines than any other achievement.

The reasons for this unimpressive track record are easy to understand. The heads of state attending the economic summit are politicians, and politicians find it easier to discuss politics than to deal with economics. Even when the summit agrees on some particular economic policy, its impact is often limited. Long experience has demonstrated that arbitrary decisions imposed from the top down aren't as effective as those produced from the bottom up by countless individual consumers and merchants in the open marketplace.

Despite its many shortcomings, the annual economic summit still serves at least one useful purpose: It tends to force top political leaders to stop ducking tough economic problems and look at them in an organized, cooperative way.

With interest rates rising, the prospect of renewed inflation on the horizon, and tough trade barriers to be dismantled, there's certainly no shortage of demanding challenges as the leading industrial nations prepare to convene in Toronto.