The paper critically analyzes the main features of foreign aid at the beginning of the 21st century. It discusses the key facts as well as the most important theoretical debates. It shows that the 2000s have witnessed a marked emphasis on the detrimental effects of aid and that studies of the impact of aid are therefore characterized by uncertainty and inherent tensions. The paper firstly defines the concept of 'aid', and shows its complexity, as there are many different sources and types of aid flows. Secondly, it presents an overview of the key facts regarding global aid flows. Thirdly, it examines a much-debated key theoretical justification of aid, i.e. the impact of aid on growth of recipient countries. Fourthly, it assesses the increasing controversies regarding aid, which underscore its negative effects at the macroeconomic level, in particular the problems created y aid dependence. It finally underlines the other negative effects of aid, which stem from the characteristics of the aid relationship itself, notably the problems of incentives, political economy and coordination.