Whether those who claim benefits should face a work requirement has been an issue of long-standing social concern. Important examples of schemes which require work are the Californian workfare program, Indian food security schemes and the English Poor Law of 1834. We present two arguments for demanding work for benefits: first, a work requirement can scree the truly needy from those who are not in need of support and second, it can provide incentives for people to invest in skills which enable them to avoid poverty. In the context of a simple model of a target population with two ability types we find conditions under which a work requirement reduces the costs of poor relief, and those when it does not. We concentrate on a case when work done in return for benefits has no social value, showing that even if this is true, work requirements may be a valuable policy tool.

An analysis of technology adoption decisions by poor farmers is provided. Some possible empirical models for studying technology adoption are reviewed. The issue of theoretical consistency is dealt with in terms of the costs of such consistency, measured in data needs and model complexity, and the benefits, measured in terms of understanding the micro-economic foundations of adoption.

This paper argues that the possibility of bailouts to financial intermediaries distorts the supply price of capital and creates an argument for taxing financial bonuses separately from other sources of income. We develop a model of financial contracting where intermediaries compete for workers whose actions affect productivity and risk-taking in the financial sector. This derives the second-best optimum and market equilibrium. The optimal taxes that we propose increase both equity and efficiency compared to the pure market outcome.