In a globalised setting, the centrality of institutional evaluation for quality education and production of knowledge has been emphasised in educational reforms. This paper discusses theoretical concepts and practical implications involved in institutional evaluation as developed in contemporary higher education policies in two countries of the Mercosur block - Argentina and Brazil. In a critical, intercultural framework, it argues that homogenised evaluation practices, which are blind to the sociocultural diversity of the Mercosur countries, do little to improve the institutions' overall quality of education, From the evidence of the study, some potentialities and limits of institutional evaluation to promote education for equity and transformation are presented. (C) 2000 Elsevier Science Ltd. All rights reserved.