In the current funding paradigm, a small group of researchers join together in a single grant to write a scientific application. When the initial funding cycle is over, they may seek further funds to continue development of the project.
OSS helps distribute the cost across a wider group, and thus suggests a more efficient funding model. By providing support during a project's initial phase, funding agencies enable a project to prove itself and attract users and volunteer developers. When the funding ceases, the project can continue to flourish because the code is freely available and the user base has a vested interest in it's continued development. Because of this, users will be motivated to allocate small amounts of their grant monies for continued development of the project, thus spreading the costs beyond the initial development team.