A/HRC/4/35 page 25 VI. CONCLUSION 82. The permissive conditions for business-related human rights abuses today are created by a misalignment between economic forces and governance capacity. Only a realignment can fix the problem. In principle, public authorities set the rules within which business operates. But at the national level some Governments may simply be unable to take effective action, whether or not the will to do so is present. And in the international arena States themselves compete for access to markets and investments, thus collective action problems may restrict or impede their serving as the international community’s “public authority”. The most vulnerable people and communities pay the heaviest price for these governance gaps. 83. There are lessons to be drawn from earlier periods. The Victorian era of globalization collapsed because Governments and business failed to manage its adverse impact on the core values of social community. Similarly, the attempt to restore a laissez-faire international economy after the First World War barely made it off the ground before degenerating into the destructive political “isms” that ascended from the left and right, and for which history will remember the first half of the twentieth century - all championed in the name of social protection against economic forces controlled by “others”. There are few indications that such extreme reactions are taking root today, but this is the dystopia that States and businesses need to consider, and avoid, as they assess the current situation and where it might lead. Human rights and the sustainability of globalization are inextricably linked. 84. This report has identified areas of fluidity in the business and human rights constellation, which in some respects may be seen as hopeful signs. By far the most consequential legal development is the gradual extension of liability to companies for international crimes, under domestic jurisdiction but reflecting international standards. But this trend is largely an unanticipated by-product of States strengthening the legal regime for individuals, and its actual operation will reflect variations in national practice, which is not an ideal solution for anyone. No comparably consistent hard law developments were found in any other areas of human rights, which leaves large protection gaps for victims, as well as predictability gaps for companies who may still get tried in “courts of public opinion”. 85. Considerable innovation was found in soft law initiatives, both intergovernmental and, even more so, the multi-stakeholder hybrids. In the latter, individual States most directly concerned with a pressing problem collaborate directly with business and civil society to establish voluntary regulatory systems in specific operational contexts. In addition, self-regulation by business through company codes and collective initiatives, often undertaken in collaboration with civil society, also exhibits innovation and policy diffusion. All of these approaches show some potential, despite obvious weaknesses. The biggest challenge is bringing such efforts to a scale where they become truly systemic interventions. For that to occur, States need to more proactively structure business incentives and disincentives, while accountability practices must be more deeply embedded within market mechanisms themselves.