This paper examines the relationship between aid and growth using cross-sectional and panel data, correcting for potential biases. Despite these corrections, the study finds little robust evidence of a positive or negative relationship between aid inflows and economic growth. It also finds no evidence that aid is more effective in better policy or geographical environments, or that certain forms of aid are more effective than others. The findings suggest that for aid to be effective in the future, the aid system must be rethought. The paper addresses the issue of endogeneity by using an instrumentation strategy to isolate the exogenous component of aid. It finds that aid has a negative and statistically significant effect on long-run growth in most cases, with an increase in aid of 1 percentage point of GDP correlated with lower long-run growth of approximately 0.1 percentage points per year. However, the results are not robust to different specifications and time horizons. The study also finds that the effects of aid are small and not consistently positive. It finds weak evidence that aid works better in some geographical settings, but this finding is not strongly supported. The paper concludes that the cross-country evidence does not provide strong support for the effectiveness of aid in promoting growth. The results suggest that aid may not be as effective as previously thought, and that the aid system needs to be rethought to be more effective. The paper also highlights the importance of considering the quality of policies and institutions in assessing the effectiveness of aid.This paper examines the relationship between aid and growth using cross-sectional and panel data, correcting for potential biases. Despite these corrections, the study finds little robust evidence of a positive or negative relationship between aid inflows and economic growth. It also finds no evidence that aid is more effective in better policy or geographical environments, or that certain forms of aid are more effective than others. The findings suggest that for aid to be effective in the future, the aid system must be rethought. The paper addresses the issue of endogeneity by using an instrumentation strategy to isolate the exogenous component of aid. It finds that aid has a negative and statistically significant effect on long-run growth in most cases, with an increase in aid of 1 percentage point of GDP correlated with lower long-run growth of approximately 0.1 percentage points per year. However, the results are not robust to different specifications and time horizons. The study also finds that the effects of aid are small and not consistently positive. It finds weak evidence that aid works better in some geographical settings, but this finding is not strongly supported. The paper concludes that the cross-country evidence does not provide strong support for the effectiveness of aid in promoting growth. The results suggest that aid may not be as effective as previously thought, and that the aid system needs to be rethought to be more effective. The paper also highlights the importance of considering the quality of policies and institutions in assessing the effectiveness of aid.