The "pg_config executable not found" error occurs when installing Psycopg2, a PostgreSQL database adapter for Python, due to the lack of necessary PostgreSQL development libraries and headers. To solve this issue on Windows, Mac, or Linux platforms, users need to download and install the relevant PostgreSQL installation, configure their system's PATH variable accordingly, and reinstall the problematic Python package. For Mac users, alternative package managers like Homebrew or MacPorts can be used to simplify the process.