Abstract Policy capacity is vital for a nation's prosperity and sustainability, enabling governments to fulfill diverse responsibilities, such as security, economic growth, and accountable governance. This study evaluates policy capacity across countries from 2014 to 2020 using Sustainable Governance Indicators by the Bertelsmann Foundation. Focusing on executive capacity, which encompasses policy capacity's analytical, managerial, and political aspects, we gauge governments' ability to implement sustainable policies. Executive capacity is further classified into steering capability, policy implementation, and institutional learning. Findings show that policy capacity significantly influences policy effectiveness in all countries, with high‐capacity countries demonstrating more impact. Enhancing policy capacity through efficient steering, implementation, and learning can improve policy effectiveness and foster responsive governance for sustainable development. This research provides valuable insights for policymakers seeking to bolster governance capacities and achieve positive policy outcomes.
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