Not that I advocate it, but just for a slightly clearer picture of what that world would look like: a situation where lack of copying restrictions leads to the government being the only one paying for development of software for distribution is a very different one than where "all software development [is left] in the hands of the government" - people would still build on what's there, and may hire people to adapt those solutions to particular needs. And of course that's ignoring the fact that you'd probably have a comparable amount of volunteer FLOSS development going on in general.