Energy Insecurity, Digital Transformation, and Institutional Quality: A Systems Perspective on the Core Dimensions of Sustainable Development in Landlocked Developing Countries

ABSTRACT Achieving sustainable development in structurally constrained economies remains a major challenge in the pursuit of the Sustainable Development Goals (SDGs), particularly in Landlocked Developing Countries (LLDCs), where energy insecurity, limited digital infrastructure, and weak institutional capacity intersect. This study examines how energy access, digital transformation, and institutional quality jointly influence the core dimensions of sustainable development using a systems perspective that emphasizes their interdependent and conditional relationships. Drawing on panel data for LLDCs from 2000 to 2023, the analysis employs the Dynamic Common Correlated Effects Mean Group (DCCE‐MG) estimator to address cross‐sectional dependence and slope heterogeneity. The findings reveal a sustainability trade‐off in the baseline model: energy access, digital transformation, and institutional quality are each positively associated with economic growth and social well‐being but are associated with higher carbon emissions. However, incorporating interaction terms is associated with a substantial reduction in this trade‐off. Digital transformation is associated with stronger economic outcomes when supported by reliable energy infrastructure. Likewise, the positive association between energy access and development outcomes is stronger under higher institutional quality, while institutional quality is similarly associated with stronger relationships between energy and digital systems and the core dimensions of sustainable development. These findings suggest that sustainable development in LLDCs is conditional on the alignment of key structural components, with stronger outcomes being associated with complementarities among energy access, digital transformation, and institutional quality. The study advances a systems‐based framework and provides policy insights emphasizing coordinated investments across energy, digital, and institutional domains for balanced development.