Should We Push Government Activity to Higher or Lower Levels?

Well… It depends. Government spending should usually be pushed to lower levels (when possible). The advantages or disadvantages of a new bridge, etc. can be seen more easily nearby, especially when it's paid for by the local people.

Government regulation, on the other hand, should sometimes be pushed to higher levels. It has very large externalities. For example, zoning laws in suburbs frequently increase rents in the inner city. In the other direction, anti-gentrification regulations push the upper middle class out of cities and increases commutation times. This even applies to national governments. The US ethanol mandate increases prices all over the world. If a UN resolution called for the US to stop the ethanol mandate I might even have a strange new respect for the UN.

I was reminded of this by the controversy over the attempt to have the Colorado state government rein in regulation of fracking by local governments.