New Perspectives on Public Goods Production: Policy Implications of Open Source Software

This article reveals some empirical data regarding the trend of evolving open source software (OSS) policies globally. Additionally, this article investigates why so many governments are considering support of OSS development, and weighs the pros and cons of such policies. The ultimate conclusion is that when two systems are equally suitable, governments may reasonably choose OSS over proprietary software because software industry market failures may justify such support of OSS development. While governments considering supporting OSS are primarily concerned with significant switching costs and incompatibility problems, OSS is actually superior to proprietary software because it increases compatibility and consequently decreases switching costs in the long term. Further, OSS will not only help developing countries build their information technology capabilities, but will also promote competition in the software market.