1.Laws of the country

Countries that are known to have high levels of software piracy often have laws which are inefficient in countering such forms of piracy or persecuting those who violate these laws. The main reason for this discrepancy can be attributed to the differing desires for intellectual property regulations between developed and developing countries. As software developers often come from highly developed parts of the world, it is often these countries that actively push for stringent international intellectual property laws for these developers and their hard earned creations.

On the other hand, developing countries often lack the expertise and resources needed to create software on a scale similar to that of a developed country. Furthermore, the users of such software in developing countries often have no intention to pay for or are unable to afford such software. This scenario highly parallels Mancur Olson’s  Logic of Collective Action which states that free riders have no incentive to compensate anyone for something which is free. In this context, users who are able to obtain such software for free or at a discounted rate will often choose the cheaper option. As a result, there is often little incentive for the governments of developing countries to push for and to enforce the laws which govern intellectual property rights, and hence the decision of these countries to develop such laws only arises upon increasing pressure from their developed counterparts.

Such a scenario can be seen in China’s case. In Andrew Mertha’s book entitled The Politics of Piracy: Intellectual Property in Contemporary China, he claims that copyright laws in China were the result of external pressures from the U.S. who wanted the Chinese government to adopt copyrights laws in order to protect the rights of American artists and authors. Furthermore, upon its accession to the WTO, China was made to adopt the Agreement on Trade Related Aspects of Intellectual Property Rights immediately. However, the bureaucratic structure of the Chinese government makes the process of enforcement complicated and ineffective. In its cities, the local governments often choose to ignore court rulings which conflict with their economic priorities. Hence, while Administrative enforcement agencies, such as the National Copyright Administration of China (NCAC) are eager to act, they often lack the authority to do so. Furthermore, such agencies simply lack the resources need to overcome the massive scale of infringement and the country’s conflicting laws prohibit criminal prosecution in many cases. As a result, in 2002, only 2.5 percent of all trademark violating cases were being prosecuted in China and the country is currently labelled as one of the worst intellectual property violators worldwide.  Thus in such cases, advocacy is highly essential and cooperation between different government departments is needed.

Similarly, in 2006, the International Intellectual Property Alliance (IIPA), which is a private sector coalition of trade associations representing producers of materials protected by copyright law in the U.S, highlighted that there was a total lack of software piracy enforcement in Bangladesh and urged its government to impose stricter laws and stringent controls over the situation. However, the situation in 2009 is no better as the IIPA reported that the country has “not made sufficient progress in this area”. The IPPA further claimed that the country’s lack of enforcement agency is one of the key factors for such weak standards of intellectual property enforcement. However, the government attributed this to the shortages of equipment necessary to detect pirated products among software users in the country.

The issue of software piracy and copyrights have led to more unified jurisdictions globally. Similar to how China was "pressured" to adopt such laws, developing countries are gradually being coaxed to implement similar jurisdictions and copyright solutions to curb their high rates of piracy. As developed countries have more resources, they are often in the stronger position to influence and impress these laws upon their developing counter parts in order to protect their local developers. A direct implication of this would be increasing illegality of the actions of software pirates, thus allowing them to be persecuted more easily. However, such laws do complicate the definitions of legal property to a certain extent. As software in general has no marginal cost and is not physical in nature, such laws would suggest that stealing without causing a direct loss of property to the owner is in fact illegal. Therefore, in future, it might be necessary for us to redefine "cargo" as we know it.

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2.Culture

The levels of online piracy can also be influenced by the cultural ethics of a particular country. In Bryan W. Husted’s article entitled The Impact of National Culture on Software Piracy, it was shown that the average information systems professional takes a moral stand against software piracy only if it was a societal norm or if the consequences were dire. A work related issue that is closely tied to cultural values is the concept of individualism. As this represents the way in which individuals relate to one another in society, it often displays their cognitive as well as emotional connectivity to a select group of individuals. In many of the developing countries, a culture of collectivism is found as compared to individualism. In such cultures, equity is often replaced by equality when dealing with family, friends, colleagues etc. As such, Husted claims that in such countries (eg. India, China) there is often a larger emphasis on sharing and thus we can expect that the same principles apply to software.

 This was illustrated when the Indian government who openly declared that “individual claims on intellectual property should be subordinated to fundamental claims of social well-being.” On the other hand, in developed countries such as the United States of American, Switzerland, Germany etc, it was found that a concept of equity or fairness was more prevalent and was more relevant in explaining the trend of a lower rate of piracy as individuals evaluated software piracy based on its outcomes and impacts on the developers rather than the inputs that were present in the process of exchange. Furthermore, Gerard Hendrik Hofstede, who specializes in studying the interactions between national cultures and organisational cultures, has pointed out the strong relationship between richer individualism and economic development. He noted that wealthier countries where often more individualistic than poorer ones and this would then further substantiate the co-relation between collectivism in developing countries and the higher rates of piracy in such areas.

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3.Accessibility to the technology available

An explanation given for a rise in online piracy was the increase in accessibility of computers and the internet. As the availability of internet became more rampant, the avenue of piracy increased drastically. People are able to connect faster, download faster and thereby pirate faster. This exponential increase of users subsequently led to a similar increase in number of people who resort to online piracy. The Internet, once created for research collaboration, has now been abused to provide an avenue for people to upload and download software while being in violation of copyright laws.

This contrasts with the previous age when the internet was non-existent and people lacked a platform to work together. In the earlier years of the development of the Internet, pirating was not prevalent as few had the knowledge to do so. In nutshell, the accessibility to technology in the 21st century has increased the occurrence of online pirates. However one may question if the availability of technology truly spearheaded the level of piracy, shouldn’t piracy be prevalent in developed countries? Yet, the trend does not follow suit. In the age of modern technology, knowledge of technical know-how spreads across the world instantly and one can easily google information on ways to pirate without having to develop a system for on their own.

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4.Income Disparity

High software prices are frequently labeled as the main cause of online piracy. Consumers tend to blame exorbitant prices of software for their reluctance to purchase them. In the article, The Economic Impact of Counterfeiting and Piracy, it is argued that standards of economic development coupled with consumption patterns of particular countries will either motivate or discourage the sales of original content.

We shall further elaborate on this using the theory of purchasing power parity. (PPP) This index equalizes the purchasing power of different currencies in their home countries for a given basket of goods. This indicates that a person living a country with higher PPP will have greater purchasing power for any normal goods. According to the article Influences on software piracy: Evidence from the various United States, it was found that a 1% increase in per-capita income correlates with a 0.25% reduction in piracy and vice-versa. Similarly, People in developing countries are often unable to afford the price of the software given their financial difficulties. This induces them to resort to means of piracy. A lower purchasing power translates to a larger benefit from online piracy.

As explained in the Nonlinear Income Inequality Effect on Software Piracy by Seoung Joun Won & Jongick Jang, the proportion of the population with net benefits from piracy increases with income inequality brought forth when a lower PPP is drawn.
Thus, anti-piracy policies would give software producers a greater advantage in countries where income inequality is moderate as compared to countries where the income inequality is severe. According to the China Market Research Group’s findings, affordability is a big factor for the Chinese population, due to their comparatively low wages and subsequent reluctance to pay for original material.
In conclusion, the financial ability to purchase software varies in each country. Also, regulation of piracy should be strategically structured in considering the existence of income inequality.
 

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