Government Preferences for Promoting Open-Source Software: A Solution in Search of a Problem

Governments around the world are making or considering efforts to promote open-source software at he expense of proprietary software. This article examines the economic basis for these kinds of government interventions in the market. The article discusses the industrial organization and performance of the proprietary software business and describes how the open-source movement produces and distributes software. It then surveys current government proposals and initiatives to support open-source software and examines whether there is a significant market failure that would justify such intervention in the software industry. The article concludes that there is no evidence of any significant market failures in the provision of commercial software and no evidence that the establishment of policy preferences in favor of open-source software on the part of governments would increase consumer welfare.