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Washington, D.C.
The Road Not Traveled
Education Reform in the
Middle East and North Africa
MENA DEVELOPMENT REPORT
©2008 The International Bank for Reconstruction and Development / The World Bank
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Education and Economic Growth 39
Education and Income Distribution 54
Education and Poverty Reduction 65
Summing Up 75
Endnotes 76
References 77
iii
iv Contents
Chapter 3: New Challenges Facing the Education Sector
in MENA 83
Globalization, Education, and the Knowledge Economy 84
Education and the Knowledge Economy 86
Demographic Changes in MENA and Education 95
Education Finance 102
Summing Up 110
Endnotes 111
References 112
P
ART II INTRODUCTION 115
Chapter 4: Analytical Framework 117
Three Building Blocks 118
Applicability of the Approach across Levels of Education
and Countries 130
Summing Up 134
Endnotes 134
References 135
Chapter 5: The Road Traveled Thus Far in MENA 137
The Path Taken So Far: A Qualitative Story 138
The Path Taken So Far: A Quantitative Story 149
Summing Up 154

Chapter 9: The Road Ahead 281
From Engineering Inputs to Engineering for Results 284
From Hierarchical Control to Incentive-Compatible
Contracts 286
Accountability to the State versus Accountability to the
Public: Education Has a New Boss 292
Synchronizing Human Capital Accumulation with
Labor Demand 296
Getting Started Down the Road of Reform 297
Endnotes 298
References 299
Statistical Appendix 301
Index 345
List of Tables
Table 1.1 Average of Public Expenditure in Education
as a Percentage of GDP, 1965–2003 11
Table 1.2 Public Expenditure per Student by Level
of Education and Ratio of Expenditure for
Secondary/Primary and Tertiary/Primary, 2000 12
vi Contents
Table 1.3 Access to Primary School Education:
Net Enrollment Rate, Repetition Rate, and
Pupils Reaching Grade Five, 1970–2003 13
Table 1.4 Gross Enrollment Rates in Secondary and
Tertiary Education, 1970–2003 15
Table 1.5 Average Years of Schooling of the Total
Population Aged 15 and Over, 1960–2000 16
Table 1.6 Average Test Scores of TIMSS and PISA,
GDP/Capita (2003), and Gross Secondary
Enrollment Rate 19

Table 2.8 Private and Social Rates of Return to
Education by Level of Education,1970s–1990s 63
Contents vii
Table 2.9 Female Labor Force Participation Rates,
1980–2003, by Country 64
Table 2.10 Share of People Living on Less than $1
and $2 per Day by Region, 1981–2001 66
Table 2.11 Proportion of Population under Poverty
Line, 1990s 68
Table 2.12 Fertility Rates, 1962–2003 73
Table 5.1 Distribution of Reform Measures by Levels
of Education, Percent 150
Table 5.2 Distribution of Reform Measures by
Objectives of Education, Percent 151
Table 5.3 Distribution of Reform Measures by Type
of Reform over Time, Percent 152
Table 5.4 Distribution of Reform Measures by Sector
over Time, Percent 152
Table 5.5 Distribution of Reform Measures by
Objective and Reform Phases, Percent 153
Table A.1 The MENA Education Reform Database 158
Table A.2 Examples of Engineering Measures 159
Table A.3 Examples of Incentives 160
Table A.4 Public Accountability Measures and
Examples 161
Table 6.1 Engineering Features of the Education
Systems in Selected MENA Countries 182
Table 6.2 Primary Teacher Stocks, Flows, and
Additional Teachers Needed to Reach UPE
by 2015 188

Table 8.4 Foreign Labor Force in the Gulf States,
1975-2000 249
Table 8.5 Share of Arabs in Total Foreign Population
in the Gulf States, 1975 and 2002 249
Table 8.6 The Distribution of the Labor Force by
Arab and Asian Origin in Kuwait, 1989 and
2000 250
Table 8.7 Temporary Egyptian Migrants by Receiving
Country, 2000 251
Table 8.8 Occupation of Egyptian Migrants in Arab
Countries, 1985 and 2002 251
Table 8.9 Work Permits Granted to Egyptians in
Some Arab Countries by Occupation,
1985–2002 252
Table 8.10 Distribution of Migrants by Educational
Level in Selected MENA Countries,
Various Years 252
Table 8.11 Population from North Africa in Selected
EU Countries 253
Table 8.12 Moroccan Migrants in Main OECD
Countries, 2002 254
Table 8.13 Egyptian Migrants in OECD Countries, 2000 255
Table 8.14 Immigrants (Aged 15 and Over) in Canada
by Country of Birth and Level of Schooling,
2001 255
Table 8.15 Stocks of Foreign and Foreign-Born Labor
in the Labor Force of Selected OECD
Countries, 1992–2001 258
Table 8.16 Workers’ Remittances, 1990–2003 263
Contents ix

1970–2004 319
Table B.5 Gross Intake Rate to Grade 1, 1970–2003 320
Table C.1 Gender Parity Index of Primary Gross
Enrollment Rate, 1960-2003 321
Table C.2 Gender Parity Index of Secondary Gross
Enrollment Rate, 1960–2003 322
Table C.3 Gender Parity Index of Tertiary Gross
Enrollment Rate, 1970–2003 323
Table C.4 Gender Parity Index of Gross Intake Rate,
1970–2003 324
Table C.5 Gender Parity Index of Repetition Rate in
Primary Education, 1970–2003 325
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Table D.1 Survival Rate to Grade 5, 1970–2003 326
Table D.2 Primary Completion Rate, 1990–2003 327
Table D.3 Repetition Rate in Primary Education,
1970–2003 328
Table D.4 Repetition Rate in Secondary Education,
1970–2003 329
Table D.5 Dropout Rate in Primary Education,
1975–2004 330
Table D.6 Dropout Rate in Secondary, Lower
Secondary, and Upper Secondary
Education, 1975–2004 331
Table D.7 Private Enrollment Share in Primary
Education, 1985–2003 332
Table D.8 Private Enrollment Share in Secondary
Education, 1975–2003 333
Table D.9 Private Enrollment Share in Tertiary
Education, 2000–2003 334

1950–2050 96
Figure 3.4 Population Pyramid of MENA and the
World, 2002 97
Figure 3.5 Changes in the Age Group (6–11) Population
in Selected MENA Countries, 1950–2050 98
Figure 3.6 Education Attainment in the Population in
MENA (Weighted Average), Age 25 and
Above, 1975, 1985, and 2000 99
Figure 3.7 Education Attainment of Adult Population
for Selected MENA Countries, 2030 101
Figure 3.8 Public Spending on Education in MENA,
Most Recent Year during 1999–2003 104
Figure 3.9 Evolution of the Proportion of Private
Primary Education in 1990 and 2002 106
Figure 3.10 The Absolute Value of Average Costs per
Student in MENA and Non-MENA
Countries, US$ (PPP) 107
Figure 3.11 Spending per Pupil as a Proportion of GDP
per Capita in MENA and Non-MENA
Countries, Percent 107
Figure 3.12 Pupil-Teacher Ratio by Level of Education,
1970–2002 108
Figure 3.13 Historical Enrollment of Students in
Primary, Secondary, and Tertiary Education 109
Figure 3.14 Projection of the Number of Students
Completing Secondary School in Selected
MENA Countries 109
Figure 4.1 The Three Building Blocks of the Analytical
Framework 118
Figure 4.2 Three Actors and Three Contractual

1985–2003 219
Figure 7.4 Dynamics of Labor Supply in MENA
Countries, 1950–2020 221
Figure 7.5 Private Sector Contribution to GDP,
Early 2000s 229
Figure 7.6 Contract Enforcement Procedures, 2004 231
Figure 7.7 World Bank MENA Index of Quality of
Public Sector Administration 2004,
by Region 231
Figure 7.8 World Bank MENA Region’s Index of
Public Sector Accountability 2004 232
Figure 7.9 Difficulty with Hiring and Firing in MENA 233
Figure 7.10 Non-oil Exports as a Proportion of GDP,
1990 and 2003 235
Figure 8.1 Occupation of Foreign Born by Country of
Birth in the United States, 2000 256
Figure 8.2 Top 20 Developing-Country Recipients of
Workers’ Remittances, 2003 262
Figure 8.3 Top 20 Country Sources of Remittance
Payments, 2003 262
Contents xiii
Figure 8.4 Per Capita Migrants’ Remittances by
Region, 1998–2002 264
Figure 8.5 Expatriate Rate, 2005 267
Figure 8.6 Stock of Emigrants from MENA to OECD
by Educational Level, 1990 and 2000 268
Figure 8.7A Probability of Unemployment by
Educational Level in Egypt, 1998 269
Figure 8.7B Probability of Unemployment by
Educational Level in Morocco, 1999 269

reflects the aspirations of the people for a successful integration into the
global economy in an ever changing world. Various stakeholders in the
region regard education as their most important development challenge,
and education reform is at the top of the reform agenda of many regional
governments.
Education is also a strategic priority for the World Bank in the
MENA region and worldwide. The preparation of this report has bene-
fited from the experience accumulated from Bank collaboration with the
region in education—a relationship that has lasted for more than 40
years. Tunisia received in the early 1960s the first World Bank loan for
any education project. The preparation of this report has also benefited
from the support of a network of scholars, practitioners, and opinion
leaders, within and outside the region, who applied their knowledge and
expertise to the challenge of education in MENA.
This report traces the successes and the challenges facing the devel-
opment of education to identify promising education reform options for
the future. It is grounded in a new paradigm that is expected to increase
the effectiveness of reform efforts: It emphasizes the central role of in-
centives and public accountability to meet sector goals. Most reforms in the
region have attempted to engineer changes in the education system:
building schools, hiring teachers, and writing curricula. The success of
future reforms will require instead changes in the behavior of key educa-
tion actors—teachers, administrators, and educational authorities. This
is the road not traveled in the education sector.
Since the early 1960s, the MENA region has registered tremendous
gains in terms of more equitable access to formal education. In the 1950s,
very few children, particularly girls, were attending formal schools. Now
Foreword
xv
xvi Foreword

challenges. In addition, the right conditions need to be created for edu-
cation reform to have its full effect. This report examines one of the most
critical prior conditions—a well-functioning labor market. In the case of
MENA, the relevant labor market extends much farther than the con-
fines of any country or even the region because of important migration
trends and opportunities. This report argues that reforms in this area will
need to be implemented hand-in-hand with those for the education sys-
tem proper.
Having succeeded in expanding the education systems to include most
eligible children—boys and girls—the MENA region is now ready to
travel a new road. While the exact configuration of this new road will not
be the same for each country, all countries, irrespective of their initial
conditions, will require a shift from “engineering inputs” to “engineer-
Contents xvii
ing for results,” along with a combination of incentives and public ac-
countability measures, as well as measures to improve labor market out-
comes. It is our hope that this report will serve as an effective guide to
these outcomes. In traveling the road ahead, the Bank looks forward to
continuing to walk together with the MENA region, in a mutually ben-
eficial relationship.
Daniela Gressani
Vice President, Middle East and North Africa Region
The World Bank

Acknowledgments
Ahmed Galal is the principal author and team leader of this report.
Michel Welmond guided the staff research effort and contributed to the
analysis of education reforms and conclusions. Members of the core team
consisted of Martin Carnoy (human capital, economic growth, income
distribution and poverty), Soren Nellemann (new challenges facing the

made by the participants in the regional review meeting, chaired by
Daniella Gressani, especially by Inger Andersen, Michele Armitage, Ce-
cile Fruman, Hedi Larbi, Tatyana Leonova, Akiko Maeda, Hossein
Razavi, Carlos Silva-Jauregui, Hasan Tuluy, and Jonathan Walters.
The team is also grateful to the participants in the consultative work-
shops held in the region to discuss the concept note (in Egypt, Jordan,
and Morocco), as well as the participants in a number of conferences
where the report preliminary findings were presented (in Egypt,
Lebanon, and Washington, D.C.).
The report was edited by Kate Sullivan and typeset by Carol Levie,
both of Grammarians, Inc. Production and printing were coordinated by
Rick Ludwick and Andres Ménèses of the World Bank’s Office of the
Publisher.
Last but not least, the team would also like to thank all of those who
contributed and participated in the various stages of production of this
book, in particular those in government and World Bank country offices
who kindly provided information and data.
xxi
Abbreviations
CAPMAS Central Agency of Public Mobilization and Statistics
ELMS Egypt Labour Market Survey
FDI foreign direct investment
GCC Gulf Co-operation Council
GDP gross domestic product
GER gross enrollment rate
GNI gross national income
GPI gender parity index
ICT information and communication technology
IEA International Association for the Evaluation of
Educational Achievement

SSA school self-assessment
TFP total factor productivity
TIMSS Trends in International Math and Science Study
TVET technical and vocational education and training
UIS UNESCO Institute for Statistics
UNDP United Nations Development Programme
UNESCO United Nations Educational, Scientific and Cultural
Organization
UNICEF United Nations Children’s Fund
UPE Universal Primary Education
USAID United States Agency for International Development
VET vocational education and training
WDR World Bank Development Report
WTO World Trade Organization
Over view
Education is a powerful force that can speed up economic growth, im-
prove income distribution, facilitate social mobility, and reduce poverty.
It can also improve the quality of life for citizens by contributing to
longer life expectancy, lower fertility and infant mortality rates, and a
more cohesive national identity. However, none of these positive out-
comes are automatic. All too often, investment in education generates
low returns to the individuals involved and society at large. Thus, while
investment in education is a necessary condition for faster development
and prosperity, it is by no means sufficient.
This MENA flagship report explores whether past investments in ed-
ucation in the region have generated their maximum economic returns,
and, if not, why they have failed to do so. Ultimately, the answers to these
questions are being sought to help policymakers chart more fruitful
strategies in the future.
To this end, the report addresses three concrete questions:

of education, and (ii) all levels of education arguably face similar prob-
lems. They all need an efficiently functioning education process, highly
motivated and incentivized teachers and schools, and adequate voice
mechanisms for citizens to influence education objectives, priorities, and
resource allocation.
Finally, although the primary focus of the report is education, it was
important to pay special attention to domestic labor markets and migra-
tion. After all, this is where the returns to education are determined and
its impact on development made.
The organization of the report mirrors the three questions listed
above. Part I, chapters 1 through 3, makes the case for education reform
by tracing past investments in education in the MENA region, assessing
its impact on development, and reviewing the state of readiness of the
education systems to meet new challenges. Part II, which comprises
chapters 4 through 6, focuses on learning from past education reforms in
14 MENA countries on the basis of a new analytical framework. Finally,
part III, chapters 7 through 9, concentrates on labor markets and con-
cludes with a chapter that pulls all of the pieces together.
Primary Findings
The main finding of this report is that the MENA region has made sig-
nificant strides in the education sector, having started in the 1960s and
1970s from very low levels of human capital accumulation. However, it
has not capitalized fully on past investments in education, let alone de-
veloped education systems capable of meeting new challenges. The edu-
cation systems did not produce what the markets needed, and the mar-
kets were not sufficiently developed to absorb the educated labor force
into the most efficient uses. Thus, the region needs to travel a new road.