Institutional dynamics of digital transformation in environmental governance: a socio-technical analysis of OECD Countries

This study examines the complex interrelationships between digital infrastructure and environmental policy through an institutional theory lens. Using panel data from 35 OECD countries and the Augmented Mean Group methodology to address cross-sectional dependence, we investigate how institutional arrangements mediate the interaction between digital capabilities and environmental governance outcomes. Results reveal that digital infrastructure is associated with improved environmental performance ( β = 0.0267, p < 0.01), but this relationship is contingent upon regulatory quality and institutional capacity. Environmental policy frameworks ( β = 0.0353, p < 0.05) operate through complementary institutional mechanisms, while digital government services ( β = 0.0859, p < 0.10) function as critical institutional interfaces. Our findings challenge technological determinism, demonstrating instead that institutional arrangements significantly moderate the effectiveness of digital solutions in environmental governance. This research contributes to socio-technical systems theory by revealing how institutional contexts shape the translation of digital capabilities into environmental outcomes in developed economies.