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I disagree. Co-opertation in a larger entity leads to greater efficiencies and the possibility of greater strategic decisions that will pay off in the long run.
For example organising things such as major roads, railways and irrigation. You need a centralised system to be able to coordinate such projects. This infrastructure leads to economic growth and better living conditions for the people (compare pre-industrlisation Europe to today).
This is of course not only limited to infrastructure. Healthcare systems, financial regulation and defense are some other areas that benifit from centralised control.
Then you have the private sector on top of that. The major banks and heavy industry for example. The country needs certain chemicals for agricultural and industrial purpouses. Large scale production of such products is only really possible with entities that reach outside the frame of the village or street.
Of course other things can be handled better by the lower levels of government.
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"I am the wrath of God. The earth I pass will see me and tremble." -Klaus Kinski as Don Lope de Aguirre
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