> - government decision making is corrupt/inefficient (they would not pick the best product, only the company that bribed them the most)
That's an strangly simple view. You think playing politics can only mean bribing them?
> government directly funding software development would not suffer from the same issues with government being corrupt/inefficient?
The public sector is not a single unified hivemind. There are multiple different levels of organisation which are each working togeher and fighting each other all at the same time. But a common problem for them all is, the less rules for them exist, the more likely they will make their own descisions.
You're talking past my criticism and haven't addressed the core logic flaw in your argument.
If government is competent enough to build its own software solutions (and these creations would be valuable enough that open sourcing them would create opportunities for startups in the private sector as you've claimed!)...then they are also competent enough to buy the correct software product from a European private company.
If they cannot be trusted to buy the right software for themselves without the process being corrupted, they sure as hell can't be trusted to BUILD that software from the ground up (a much harder task!).