This article suggests three ideas. First, under the pressures of the Ottoman and Iraqi state modernity projects, two types of cultural traditions in Iraq, namely Islam and Arab tribal values, were negotiated and re-negotiated. Second, the concepts of merit based on these values changed over time and were institutionalised in education. Third, these changes created contrasting forms of moral education in the state education, the Arab tribal "diwan" and in Shi'a religious "hawza" education. Overall, the article discusses how cultural traditions were adapted in these societies in times of rapid change, how they affected moral education and how these themes may be understood historically.