In addition to his professorships, Townsend is the Principal Investigator and Project Director of the Enterprise Initiative, funded by the John Templeton Foundation, and the Principal Investigator of the Consortium on Financial Systems and Poverty, funded by the Bill and Melinda Gates Foundation.
He was the recipient of the Jean-Jacques Laffont Prize in 2011, and a Frisch Medal in 1998 for his work on village India and in 2012 for the structural evaluation of a large-scale microfinance program in Thailand; Townsend is the award's only two-time winner.
Townsend began his work as a theorist in general equilibrium models and contract theory/mechanism design, but is known primarily for his work on revelation principle, costly state verification, optimal multi-period contracts, decentralization of economies with private information, models of money with spatially separated agents, and forecasting the forecasts of others.
The Townsend Thai study was the first of its kind and has been the stepping stone for many other applied and theoretical projects in economic development and contract theory.
[2] In 2012, a series of documentary films was created about the people and research behind the Townsend Thai Project.