Informed by the debates on the transformation of welfare states in advanced industrial economies, this article evaluates the changing role of the state in welfare provision in Turkey. Turkey's welfare state has long been limited and inegalitarian. Strong family ties coupled with indirect and informal channels of welfare (ranging from agricultural subsidies to informal housing—both costly but politically expedient) have compensated for the welfare vacuum. At first glance, Turkey's welfare reform that emerged from the 2000-2001 fiscal crisis appears like a classic case of moving towards a minimalist, 'neoliberal' welfare regime—with increasingly privatized health care and private social insurance. The state retreats via the subcontracting of welfare provision to private actors, growing involvement of charity organizations, and increasing public-private cooperation in education, health, and anti-poverty schemes. Yet, there is also evidence of the expansion of state power. The newly empowered 'General Directorate of Social Assistance and Solidarity (SYDGM)' manages an ever-increasing budget for social assistance, the number of mean-tested health insurance (Green Card) holders explodes, health care expenditures rise substantially, and municipalities become important liaisons for channeling private money and donations for antipoverty purposes. The cumulative effect is an 'institutional welfare-mix' that has actually mutated so as to compensate for the absence of the earlier, politically attractive but fiscally unsustainable welfare conduits. The result has so far been the creation of immense room for political patronage, the expansion of state power, and no significant improvement of welfare governance.