That’s the question I posed, and on which I offered some thoughts, in the fifth of our five-part hydrogen series. Punch line: the government doesn’t do a better job than any other group of folks, and arguably does a worse job because it has no mechanisms for saying “no”. Markets provide ready mechanisms for funding, and for cutting bait.
Thus even though markets don’t always and necessarily do a perfect job of getting the technology picks right because of transaction costs etc., they do a better job than any other institutions that humans have devised to allocate resources in the face of both risk and uncertainty.
I’d also like to thank Arnold Kling for his very nice post on this series, and I recommend that you read his discussion question and the comments.