Prominent theories of the origins of democracy suggests that industrialization was a driving force for democratization in the 19th and early 20th century. While there is some cross-country evidence on such a link, we know little about whether this effect is causal, and what causal mechanisms may mediate this relationship. We utilize two novel datasets to explore how industrialization drives historical democratization. In Norway, 1879 to 1913, we consider whether MPs from industrializing constituencies were more likely to vote for democratic reforms. In Switzerland, 1860-1920, we study whether more rapidly industrializing cantons were more likely to introduce referenda and other instruments of direct democracy. To support a causal interpretation we exploit that Norwegian municipalities and Swiss cantons with a greater geographical potential for hydropower were significantly more likely to industrialize after the invention of hydroelectricity.