This study investigates the impact of institutional quality on long-term economic sustainability in developing nations. Utilizing a quantitative research design, data from 45 developing economies spanning 2020 to 2025 were analyzed using panel data regression techniques. The study specifically focused on three core institutional dimensions: control of corruption, regulatory quality, and legal frameworks. The empirical results demonstrate that robust institutional frameworks significantly enhance economic sustainability metrics by fostering stable investment climates and reducing resource depletion. Conversely, weak regulatory environments correlate heavily with short-term resource exploitation and fiscal instability. The findings suggest that economic growth cannot be sustained without simultaneous investments in anti-corruption measures and legal enforcement. Consequently, the study highlights the critical need for systemic governance reforms as a prerequisite for achieving lasting macroeconomic resilience. This study investigates the empirical relationship between institutional quality and economic sustainability in a panel of 45 developing nations over the period 2005– 2025. While short-term macroeconomic growth is frequently prioritized in emerging economies, long-term economic sustainability requires robust regulatory and structural foundations. Utilizing the System Generalized Method of Moments (GMM) and Autoregressive Distributed Lag (ARDL) co-integration techniques, this paper evaluates institutional quality through a composite index of the Worldwide Governance Indicators (WGI), focusing on the rule of law, control of corruption, and regulatory quality. The empirical findings reveal that high-quality institutions exert a positive and statistically significant impact on sustainable economic progress by optimizing resource allocation and attracting green foreign direct investment (FDI). Furthermore, the results demonstrate a non-linear relationship, suggesting an institutional threshold necessary to effectively transition raw capital into long-term wealth without causing environmental degradation. Conversely, weak institutional frameworks exacerbate the "resource curse" and diminish the efficacy of sustainable economic policies. Based on these insights, this study recommends that policymakers in developing economies prioritize legislative enforcement, strengthen independent anti-corruption bodies, and align local governance structures with the United Nations Sustainable Development Goals (SDGs) to secure enduring economic stability