This report compiles a rich set ofpreviously unavailable data to define where the educationsector in Albania has evolved, what key challenges remain,and the priority areas for action by the Albaniangovernment. The report finds that four broad tasks must betackled to improve education. The country must: 1) increaseenrollment rates with the goal of achieving truly universaleducation in primary and lower secondary schools, andreversing the actual trend of decreasing secondaryenrollment; 2) improve the quality of education, whichrequires developing human resource policies--such as teacherdevelopment programs and improved salaries--that willattract good teachers and give them incentives to performwell in classrooms; and providing an adequate physicalschool environment, which means, among other things,renovating and adequately maintaining school buildings; 3)increase public spending on education, which requiresdeveloping clear priorities and reducing relative spendingon tertiary education; providing constant and reliablefunding to support the identified policy priorities; andincreasing spending on non-wage expenditures andinvestments; and 4) make better use of teachers andschoolsby decentralizing decisionmaking and responsibilitiesthat are more reasonably delegated to the local level.