This report summarizes what is known about educational improvement in Latin America and provides objectives and strategies to guide the Inter-American Development Bank (IDB) in supporting primary and secondary education in Latin America and the Caribbean over the next decade. It is based on six background papers as well as a review of the lessons learned from recent regional and country experience. The papers are "The Need for Education Reform"; "Five Critical Areas of Reform to Improve Quality and Increase Equity"; "The Challenge of Secondary Education"; "Navigating and Managing the System: Tools to Achieve Reform Goals"; "The Art of Implementing Education Reform"; and "Looking to the Future: Developing an IDB Action Plan." The critical areas of reform are making teachers partners in reform; providing more and better textbooks and teaching materials; selectively supporting the use of technology in education; decentralizing educational management and increasing accountability of key stakeholders; and strengthening early childhood education and development. The report summarizes new challenges facing secondary education in the region (i.e., meeting increasing quantitative and qualitative needs while simultaneously serving a more diverse clientele). It sets out information and management tools needed to meet long-term goals and confirms the fundamental importance of engaging in a long-term and consensual reform process. (Contains 81 references.) (SM)