Template-type: ReDIF-Paper 1.0


Author-Name: Federico Corredor
Author-Workplace-Name: Public Finance Research Cluster, Andrew Young School of Policy Studies, Georgia State University
Author-Workplace-Email: icorredorcarvajal1@gsu.edu

Title: Do Creative Industries Drive Development? Evidence from Colombia's Orange Economy Policy

Abstract: The Orange Economy Policy (PEN) was Colombia's flagship initiative (2018-2022) to position Cultural and Creative Industries (CCIs) as engines of economic development. Using administrative payroll tax data from 2016-2022, this paper employs difference-in-differences and synthetic control methods to evaluate PEN's impact on the formal economy. The results show that PEN increased firm creation and employment while reducing sole proprietorships and self-employment, consistent with a reallocation of economic activity toward more structured, firm-based production. These findings suggest that entry and hiring respond relatively quickly to targeted incentives, whereas wages and pension contributions depend on longer-term consolidation. The paper provides causal evidence on the effects of industrial policy in a non-traditional sector, highlighting its potential to promote formalization and reshape the organization of economic activity, while underscoring the importance of sustained implementation and institutional stability to translate short-term successes into long-term economic transformation.

Length: 46 pages

Creation-Date: 2026-04

File-URL: http://ayspsrd.gsu.edu/ays/ispwps/paper2616.pdf
File-Format: application/pdf

Handle: RePEc:ays:ispwps:paper2616