i understand your point, however your "driver's seat" metaphor blurs the accountability of political representation IMO. Are voters in the "driver's seat"? Local governments?

What I see as a valuable point is that federal governments with subsidies that "distort" markets for public goods and externality regulation, worsen the "tragedy of the commons".

Explaining many things to a naive person, or a kid, boils down to this type of issue, you can even extend it to nation states.

Without experience of violence, most people would intuitively understand that a "competition" between governments is problematic.

Same issue, different undertones: tax havens.