In tech people embrace micro-services despite complexity trying to arrange things to work. We do it because this way we are forced to deal with it, to negotiate between teams and services. We embrace that complexity and uncover it.
In governing we are trying to cover up this complexity with moving decision making into higher levels. Such covering up does not solve complexity, it just makes it look like it is not happening, but it is still out there.
I don't think it makes it look like it's not happening, but it is easier to manage some things at higher levels than others. If you're a business, every single governmental entity you have to deal with adds complexity into the system. You need to keep track of various sales taxes, regulations, etc. Increasing the number of jurisdictions you have to deal with increases the complexity quite a bit.
To reduce that complexity, you might get a lot of jurisdictions to band together and decide 'hey, businesses must interact with us via this standard way we all agree on." Congratulations, they have just created a government.
I think managing this complexity is incredibly difficult, no matter which strategy is used, and I don't think there is any one strategy available that solves these problems.
In some cases, it makes sense to keep the jurisdictions as small as possible. In other cases, the opposite is true, especially when considering things related to the Problem of the Commons and the like.
In governing we are trying to cover up this complexity with moving decision making into higher levels. Such covering up does not solve complexity, it just makes it look like it is not happening, but it is still out there.