Öz Large-scale privatization efforts began to have an important place in governments’ economic programs in many countries in the last two decades including Turkey. The main goal of privatization is to put an end to the inefficiencies of the state owned enterprises by freeing the resources of this huge organism to enhance the living standards of the people. A successful privatization process requires supportive market environment with four essential elements of macroeconomic stability, hard budget constraints, competitive markets, and adequate property rights. This study focuses on the hard budget constraint and investigates whether the Turkish government substitutes privatization revenue for the debt stock or not.