The purpose of this study is to evaluate critically the role Canadian foreign aid has played in the development of targeted countries. Since the object of foreign aid should be the creation of economic growth (for reasons explained below), we examine research that looks at the effects of aid on growth and specific standard-of-living indicators. An extension of this research suggests that we take a different approach to those countries with good governance than to those with bad governance. In this context, we examine the Canadian foreign aid record. Finally, this study examines the appropriate role of aid in different institutional environments and how to best assist less developed countries.