Thanks Robert. To answers your two questions;

1. States' interests may at times give way for central government's interest on an adhoc basis as a necessity. Also some states may become so developed and powerful that they become threat to the central government and the likelihood of complete breakaway. Disadvantage?

2. I don't agree with your view that the system is (selfish), because individual states progress in terms of development contributes to the overall prosperity of the country as whole.

And for states that do not have the resources, as you take for granted (believe), there is the option of linking up with other bigger states or two small states forming one state.