The article summarizes the influence of political leaders on institutions which, according to institutional economics, directly influences economic growth. Furthermore, the study reviews the literature in which leadership itself becomes a significant factor as a possible explanation for the reason for economic growth through institutional change. Although political leader or its role in growth is still viewed as a controversial issue in economics, the paper emphasises what kind of cause-effect relations exist between political leaders and economic growth and reveals that leaders do matter directly in economic performance by the formation of institutions.