We consider a fairly general model (extension of the Gurtin-MacCamy model of population dynamics) of an age structured control system with nonlocal dynamics and nonlocal boundary conditions. A necessary optimality condition is obtained in the form of Pontryagin's maximum principle, which is applicable to a number of practically meaningful models where the previously known results fail. We discuss such models (an epidemic control, and a capital accumulation model) as illustrations.

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Drug use and related problems change substantially over time, so it seems plausible that drug interventions should vary too. To investigate this possibility, we set up a continuous time version of the first-order difference equation model of cocaine use introduced by Everingham and Rydell (1994), extended to make initiation an endogenous function of prevalence. We then formulate and solve drug treatment and prevention spending decisions in the framework of dynamic optimal control under different assumptions about how freely drug control budgets can be manipulated. Insights include: (1) The effectiveness of prevention and treatment depend critically on the stage in the epidemic in which they are employed. Prevention is most appropriate when there are relatively few heavy users, e.g. in the beginning of an epidemic. Treatment is more effective later. (2) Hence, the optimal mix of interventions varies over time. (3) The transition period when it is optimal to use extensively both prevention and treatment is brief. (4) Total social costs increase dramatically if control is delayed.

There has been considerable debate about what share of drug control resources should be allocated to treatment vs. enforcement. Most of the debate has presumed that there is one answer to that question, but it seems plausible that the mix of interventions should vary as the size of the problem changes. We formulate the choice between treatment and enforcement as an optimal control problem and reach the following conclusions. If initiation into drug use is an increasing function of the current number of users and control begins early, then it is optimal to use very large amounts of both enforcement and treatment to cut short the epidemic. Otherwise the optimal policy is not to stop the growth of the epidemic, but rather to moderate it. Initially this should be done primarily with enforcement. Over time, enforcement spending should increase, but not nearly so fast as treatment spending. Hence, treatment should receive a larger share of control resources when a drug problem is mature than when it is first growing. If initiation rates subsequently decline, enforcement's budget share should drop further in the ensuing declining stage of the epidemic.