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SCOPE ANDIMPACT OFPIRACY 299Other studies have tried to identify cultural and socioe-
conomic indicators that are predictors of software piracy
rates. These studies have the advantage of using software
industry estimates of piracy rates rather than relying on
self-reporting in surveys, which is an unreliable indica-
tor of actual behavior. On the other hand, these studies
perforce use data at the level of whole nations and so
necessarily average out the differences between individ-
uals or between regions within a given country. It should
be noted that the piracy data on which these studies are
based include only business software. There is probably
a strong correlation between business and personal copy-
ing of software in each country, and so the results should
be applicable to rates of individual softlifting as well. Mar-
ron and Steel (2000) and Husted (2000) found that lower
piracy rates are associated with higher levels of economic
development (per capita GDP or income), with greater dis-
parities in income within a country (implying a smaller
middle class), and with stronger institutions to enforce
contracts and protect property from expropriation. They
also found that individualist cultures, i.e., those that value
individual rights and ownership, have lower piracy rates
than more collectivist ones that put greater value on mu-
tual help and sharing. They did not find a significant cor-
relation with the average level of education.
These results are reasonable. Higher levels of economic
development mean that individuals and businesses are
more able to pay for software. In countries with greater in-
come inequalities, the lower classes are unable or barely
able to afford computers at all, and so most technology
purchasing is done by the wealthy who can easily afford to
pay. It is the middle classes, often struggling to make ends
meet, that are the most likely to seek to cut costs by pirat-
ing software. Individualist cultures, and those with strong
institutional protection of property and contract rights,
are characterized by attitudes that will be less likely to
view softlifting as legitimate. Collectivist cultures, in con-
trast, tend to deemphasize rights of individual ownership
in favor of the duties of cooperation and sharing of the
fruits of one’s creativity for the benefit of society. Therefore
those countries (which include many in southern and east-
ern Asia) have been reluctant to grant Western-style copy-
right protection to software, and even where such pro-
tection is provided by law, it must compete in the moral
sphere with strongly held traditional values of community
and solidarity.Implications of the Studies
The findings of all the studies cited above carry some im-
plications for software publishers’ efforts to reduce the
rates of software piracy. First, it appears that educational
programs aimed at increasing individuals’ awareness of
the illegal and unethical nature of softlifting will be of
limited effectiveness. The studies show that simple aware-
ness of the illicitness of softlifting has little effect on be-
havior. Technical copy protection mechanisms (discussed
in a later section) are also unlikely to be effective. They
are inevitably defeated and may actually encourage piracy
due to the challenge they present. On the other hand,
perceived consequences, in terms of benefits as well as
penalties, are important factors in most individuals’ deci-sions whether or not to softlift. The studies indicate that
increasing the likelihood of being caught and punished
would deter softlifters. However, it is impractical to pros-
ecute individual softlifters, and besides, an overly aggres-
sive enforcement program could backfire by creating an
adverse public reaction.
It appears that the most practical and effective means
available to the software publishers for reducing softlift-
ing is to lower prices (perhaps charging different cate-
gories of customers different prices) while enhancing the
perceived value of products by providing user manuals,
technical support, and inexpensive upgrades. The studies
show that if individuals value the software for its useful-
ness, and value the support provided by the vendor, they
will be more willing to pay for it. The validity of these
reasons is confirmed by the observation that the Linux
operating system and its accompanying application soft-
ware from the GNU organization and elsewhere are suc-
cessfully sold by a number of vendors, even though the
software is all legally obtainable for free over the Internet.
These vendors succeed in charging money for the software
because they provide valuable support services, including
documentation and help lines. Firms that depend on com-
puter systems for their daily operations willingly pay for
such support because they want to have someone to turn
to for help when something fails.Organizations That Combat Software Piracy
There are two main trade organizations that represent
the software industry in its efforts to counter the illicit
traffic in software. The Business Software Alliance (BSA,
http://www.bsa.org) is an international organization rep-
resenting major software and e-commerce developers.
Its membership includes such flagship companies as Mi-
crosoft, Apple, and Adobe. Founded in 1988, its mission is
to educate computer users about copyrights, to lobby for
intellectual property legislation, and to combat software
piracy. The Software and Information Industry Associa-
tion (SIIA, htp://www.siia.net) is a coalition of software
and electronic content producers. It was formed in 1999
from the merger of the Software Publishers Association
(SPA, founded in 1984) and the Information Industry As-
sociation (IIA). Its membership includes some members
of BSA, but also includes many smaller software and in-
formation technology companies. Its mission is to pro-
mote the interests of the software and digital informa-
tion industry, to provide knowledge resources to member
companies, and to fight software piracy. SIIA still uses the
name SPA for its antipiracy arm.SCOPE AND IMPACT OF PIRACY
Estimated Piracy Rates
Estimating the extent of software piracy is not a simple
task. Obviously, many of the transactions whereby peo-
ple obtain illicit copies of software are conducted in se-
crecy, and Internet warez sites do not usually keep care-
ful records of downloads. Consequently any estimates of
piracy rates must be indirect. One of the most widely cited
estimates of piracy rates and of the economic impact of