This paper uses enhanced night-time light-based economic growth and the exogenous timing of giant oil discovery to explore the transmission of democracy to economic growth. Empirically, we extend the democracy growth model in Acemoglu et al. (2019), which involves a dynamic panel-data model with GMM-styled instrumental variable analysis for 157 countries from 1992 to 2008. Specifically, we interact the exogenous timing of the discovery of giant oil fields with the democratization variable and replace GDP using night-time lights. Also, our empirical identification exploits the time lag between giant oil discovery and development outcomes using night-time lights. We find substantial heterogeneity in economic growth under democracies depending on the timing of giant oil discoveries and the measurement of economic growth. We examine various mechanisms that might explain this heterogeneity.
JEL codes: D720, O130