quote from New York Times
Radical as this idea may sound, it is not without precedent. Undemocratic Taiwan was derecognized by most of the world in the 1970s (as the corollary of recognizing Beijing). This loss of recognition led the ruling Kuomintang party to adopt new policies in search of domestic support. The regime liberalized the economy, legalized opposition groups, abolished martial law, organized elections and even issued an apology to the Taiwanese people for past misrule, eventually turning the country into a fast-growing, vibrant democracy.
In Africa, similarly, the unrecognized, breakaway state of Somaliland provides its citizens with relative peace and democracy, offering a striking counterpoint to the violence and misery of neighboring sovereign Somalia. It was in part the absence of recognition that forced the leaders of the Somali National Movement in the early ’90s to strike a bargain with local clan elders and create legitimate participatory institutions in Somaliland
http://www.nytimes.com/2010/06/12/opini ... ebert.html



