Increasingly, public sector organizations (PSOs) outsource the delivering of important welfare
services. This gives rise to important questions of how PSOs can control their suppliers.
The purpose of this paper is to show how PSOs manage cooperation hazards of low contractibility
transactions, i.e., activities expected to be difficult to govern. The paper applies
a taxonomic configuration approach which means we apply a holistic view on the governance
of suppliers and search for internally congruent governance packages that also are
adapted to the context of the transactions. We find indications of the importance of internal
congruence in governance packages in order to effectively deal with cooperation hazards.
We also notice that the intensity in and types of controls in inter-organizational relationships
are affected by the amount of cooperation hazards. A conflict between a relational
and a bureaucracy-based governance package in one of the configurations is argued to be
the main driver behind lower expectations about positive behaviour from suppliers.