Let KP^{0} be the induction-free fragment of KP. That is, the axioms of KP^{0} are extensionality, pairing, union, Δ_{0}-separation, Δ_{0}-collection, and (since I see no way of proving this from the other axioms) the existence of transitive closures.

Following Barwise, I define the class of Σ-formulas to be the smallest class which contains atomic formulas and their negations, and which is closed under conjunction, disjunction, bounded quantification, and unbounded existential quantification. Similarly, I define the of Π-formulas to be the smallest class which contains atomic formulas and their negations, and which is closed under conjunction, disjunction, bounded quantification, and unbounded universal quantification. The negation of a Σ-formula φ is canonically equivalent to a Π-formula and vice versa; I will identify ¬φ with its canonical equivalent without further comment.

The following three facts are standard in KP. The usual proofs actually go through in KP^{0}.

**Σ-Reflection.** For every Σ-formula KP^{0} ⊦ φ ↔ ∃aφ^{(a)}, where φ^{(a)} is obtained from φ by replacing every unbounded quantifier ∃x by the corresponding bounded quantifier ∃x∈a.

**Σ-Collection.** For every Σ-formula φ(u,v),

KP^{0} ⊦ ∀u∈x∃vφ(u,v) →∃y∀u∈x∃v∈yφ(u,v).

**Δ-Separation.** For every Σ-formula φ(u) and every Π-formula ψ(u),

KP^{0} ⊦ ∀u∈x(φ(u) ↔ ψ(u)) → ∃y∀u∈x(u ∈ y ↔ φ(u)),

where y does not occur free in φ nor ψ.

Instead of Mike Shulman's foundation axiom, I will use the classically equivalent regularity axiom:

(Reg) x ≠ ∅ → ∃y∈x(x∩y = ∅).

This axiom already implies a certain amount of induction because of Δ-separation.

**Δ-Induction.** For every Σ-formula φ(u) and every Π-formula ψ(u),

KP^{0} + Reg ⊦ ∀u(φ(u) ↔ ψ(u)) → (∀u(∀v∈uφ(v) → φ(u)) → ∀uφ(u)).

For convenience, I will now assume that the language contains a function symbol rk(x) for the ordinal rank of a set. Let A be a model of KP^{0} + Reg. A cut in A is a proper initial segment I of the ordinals of A which has no least upper bound; a Σ-cut (resp. Π-cut) is one which can be defined by a Σ-formula (resp. Π-formula).

**Σ-Cut Lemma.** If A is a model of KP^{0} + Reg and I is a Σ-cut in A, then A_{I} = {x ∈ A : rk(x) ∈ I} is a model of KP^{0} + Reg.

*Sketch of proof.* The main point of contention is Δ_{0}-collection. Suppose that φ(u,v) is a Δ_{0}-formula such that A_{I} ⊧ ∀u∈x∃vφ(u,v). Consider the set of ordinals

J = {α ∈ A : ∃u∈x∀v(rk(v) < α → ¬φ(u,v))}.

This is a Π-definable initial segment of I. We cannot have I = J,
since that would violate Δ-induction. Pick β ∈ I \ J. Working in A, we can find a set y such that

∀u∈x∃v∈y(rk(v) < β ∧ φ(u,v)).

If necessary, we can cut down y so that rk(y) ≤ β and hence y ∈ A_{I}. ∎

If A has a minimal Σ-cut, then this gives a model of KP^{0} that satisfies Σ-induction. Unfortunately, there are models of KP^{0} + Reg without minimal Σ-cut.

Now, on the positive side a minor twist of the proof of the Σ-cut lemma gives the following.

**Π-Cut Lemma.** If A is a model of KP^{0} that satisfies Π-induction and I is any cut of A, then A_{I} is a model of KP^{0}.

(Π-induction implies that the Π set J defined as above must have a least upper bound β ∈ I. The rest of the proof is identical.)

So when A satisfies Π-induction, we can take a sufficiently small cut of A to get a model of KP (with full induction). In fact, we can take the maximal wellfounded initial segment of the ordinals of A, with the caveat that this cut is very often just ω.

When I have a chance, I'll try to add examples showing that you can't do better than the Σ-cut lemma and the Π-cut lemma.

**Addendum.** I just stumbled across two papers that address these questions. The first paper is by Domenico Zambella *Foundation versus induction in Kripke-Platek set theory* [J. Symb. Logic 63 (1998), MR1665739] where it is shown that foundation implies open-induction, but not Σ_{1}-induction over KP^{0} (without transitive closures). This is complemented by Antonella Mancini and Domenico Zambella *A Note on Recursive Models of Set Theories* [Notre Dame J. Formal Logic 42 (2001), MR1993394] where they generalize Tennenbaum's Theorem by showing that fragments of KP which prove Σ_{1}-induction have no computable models other than the standard one.