The world practice of recognizing self-proclaimed states shows that the people living in the territory of these entities are peoples trapped in political and legal uncertainty. Despite the fact that the aforementioned entities are characterized by the presence of a resident population, a certain territory, referendums held there (the legitimacy of which requires confirmation), as well as governments, nevertheless, the UN and a number of other international organizations refrain from giving any representation, especially international recognition, to unrecognized states. In limited conditions, under which the unrecognized political forces fail to realize their potential at the international level, the population of self-proclaimed entities is politicized, being, as a rule, between competing virtual projects of the state structure, seeking to remain in power as long as possible.
Such concepts as "frozen" or "unfrozen" conflict are used most often when it comes to inter-ethnic crises. They imply a state of crisis and also determine the clash of interests of major counterparties. When it comes to the results of conflicts, which often lead to the separation and occupation of territories, the term "unrecognized state" and similar phrases are used. But, it is important to understand that the classical definition of a self-proclaimed state, which many people usually associate exclusively with the problem of legal implementation, provides for a reflection of the logic of developments in each of the unrecognized states. Declaring statehood is not enough, since in the first place any state must ensure the well-being of its people. That is why, when it comes to a particular self-proclaimed territorial entity, it is necessary to consider that such problems can directly affect the lives of the local population, transform and subdue them.
For example, the uncertain status of an entity makes its crime situation significantly worse, especially due to the growth of smuggling. Since no international organization works in the territories of unrecognized states with the exception of monitoring services, humanitarian or human rights organisations, the real economic situation in such entities remains unknown. Virtually any self-proclaimed entity is characterized by a lack of transparency in administrative matters. A large international business does not conduct relevant research, with available investment flows being highly specialized targeted programs. Accordingly, for most of the unemployed population smuggling becomes some kind of business, the main source of income, which in turn contributes to the economic weakening of the region, as well as de-industrialization. The danger lies in the fact that it's almost impossible to control smuggling and therefore there are risks of creating channels in areas of local international conflicts through which weapons or drugs could be smuggled.
Due to its confinement and lack of international recognition, features of feudal control can be observed in self-proclaimed subjects. In this case, power relations are based on the principle of personal dependence, since it is impossible to create strong and stable political democratic institutions in an unrecognized state, because the entire public and political life of the entity is subject to the needs of mobilization development. The large-scale task of seizing power in the shortest possible time, as well as maintaining it in the conditions of international isolation and limited resource base, encourages elites to make a choice in favor of a personalistic political regime.
Nagorno-Karabakh is a classic example. Having come to power in Armenia, the separatists from the Karabakh clan took care of their political security, turning the occupied Karabakh into a military-political outpost, appointing their closest comrades from the Karabakh war to the key places.
Finally, the idealization of self-proclaimed status encourages the tactics of stifling any moderate voices. The dynamics of the conflict, militaristic rhetoric destroy any chance for neutrality and independence. The symbiosis of politics and ideology, which legitimizes aggression and encourages separatism, strengthens the position of radicals and silences those differently minded. Any attempt to discuss the quality of life and the revision of policy can be perceived as national treason. But it is nationalist rhetoric that prolongs the existence of conflicts for an indefinite time and, as a result, prevents the development of a compromise solution. For this reason, people in economical and political gridlock prefer, whenever possible, to leave self-proclaimed entities in order to find other opportunities outside unstable areas. Thus, sometimes it’s not so much the active phase of the war, but the uncertain post-war future that can depopulate entire regions, having reversed economic development.
