Subsidiarity is central to the role of government in Catholic social teaching. The idea that power should be concentrated at the lowest possible levels, only to move up when a solution can't be found is both logical, sensible and Biblical (Matthew 18: 15-17), which should appeal to our Protestant friends.
Below I've reproduced a section from the Catechism that explains the idea of subsidiarity. For further reading on this topic and Catholic social teaching in general may I suggest The Distributist Review.
1882The Catechism of the Catholic Church
Certain societies, such as the family and the state, correspond more directly to the nature of man; they are necessary to him. To promote the participation of the greatest number in the life of a society, the creation of voluntary associations and institutions must be encouraged "on both national and international levels, which relate to economic and social goals, to cultural and recreational activities, to sport, to various professions, and to political affairs."5 This "socialization" also expresses the natural tendency for human beings to associate with one another for the sake of attaining objectives that exceed individual capacities. It develops the qualities of the person, especially the sense of initiative and responsibility, and helps guarantee his rights.6
1883
Socialization also presents dangers. Excessive intervention by the state can threaten personal freedom and initiative. The teaching of the Church has elaborated the principle of subsidiarity, according to which "a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co-ordinate its activity with the activities of the rest of society, always with a view to the common good."7
1884
God has not willed to reserve to himself all exercise of power. He entrusts to every creature the functions it is capable of performing, according to the capacities of its own nature. This mode of governance ought to be followed in social life. The way God acts in governing the world, which bears witness to such great regard for human freedom, should inspire the wisdom of those who govern human communities. They should behave as ministers of divine providence.
1885
The principle of subsidiarity is opposed to all forms of collectivism. It sets limits for state intervention. It aims at harmonizing the relationships between individuals and societies. It tends toward the establishment of true international order.
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