A paper from the Washington-based CATO Institute critically appraises the 'selective' approach to foreign assistance of the US administration, including the proposed new aid initiative, the Millennium Challenge Account. The selective approach is based on the view that aid directed at countries with good policies is more effective at promoting growth and reducing poverty. The paper concludes that the new aid enthusiasm, though broadly shared, is not justified. It is based on problematic claims about aid's effectiveness and a dubious approach to development.