This paper assesses the impacts of the political system on economic development in Korea over the last four decades with a focus on the Lee Myung-bak government. A set of assessment criteria have been developed including: the establishment of proper institutions to minimise transaction costs, secure property rights and promote competition; and the implementation of national economic policy with encompassing interests, decisiveness, consistency, credibility, and a long-term orientation. Compared with the authoritarian regimes, none of the Kim Young-sam, Kim Dae-jung and Roh Moohyun governments was successful in meeting these criteria due to a lack of democratic leadership, the low level of democratic consolidation and an immature civil society. The Lee Myung-bak government has also exposed a lack of democratic leadership. A number of election pledges have been abandoned and controversial projects have been introduced, thereby damaging policy decisiveness, consistency, credibility and the quality of encompassing interests. All this indicates that the political system is important for economic development - not a matter of ceteris paribus.