Reddit mentions of The Sovereign State and Its Competitors: An Analysis of Systems Change (Princeton Studies in International History and Politics) (Princeton Studies in International History and Politics (176))

Given the regular problems with corruption in city government without armies and power over things currently managed by States and the Federal government I would argue that this line of reasoning is less than accurate. Closeness may limit new or offensive corruption, but it also routinizes and facilitates it. There are many cultures that have customary bribery, where long tradition dictates that you pass certain individuals money over and above the official fees. The direct connection to family and friends also allows you to offer advantage and bribery to direct family members to hide the corruption, if you don't have routine, informal contact with their family it is immediately suspicious to approach them with such offers.

The European Union can be considered an early US Federal Government. Until the American Civil War most of the things handled by governments in the United States were handled by the States, not the US Federal Government. The Federals handled relatively few things, even war was generally fought by State-raised Units. Over time it was determined that a number of features were handled more efficiently by the US Federal Government, so various duties migrated between the various level of government.

We aren't talking about city states. We are talking city leagues these are two distinct things. Might I recommend The Sovereign State and Its Competitors by Hendrik Spruyt. The book covers all of this very effectively and explains how the historical examples of both the city state and the city league fared. It's not that city states and city leagues don't have advantages, just that the nation state offered more to more people.