The principle of subsidiarity may be among the most controversial topics of the doctrine of Catholic Social Teaching because it is often used by both the left and the right to justify either small government or big government.
I prefer Meghan Clark's interpretation, that it is a two-sided coin. We need a system of governance that allows for the common good with multiple levels of institutions and associations working together for that common good. We cannot rely only on big government, nor can we rely only on small government. It is clear that there are proper functions belonging to each, but that most functions necessary for the common good require cooperation from all levels--individuals, families, local governments and private associations all the way to national government and international associations.
Here is Meghan's full article: Subsidiarity is a Two-sided Coin
Here are some highlights:
As a Catholic moral theologian, I must confess that the principle of subsidiarity is perhaps one of the most crucial and most misunderstood in Catholic social teaching. According to the principle of subsidiarity, decisions should be made at the lowest level possible and the highest level necessary. Subsidiarity is crucial because it has applications in just about every aspect of moral life. In medical ethics, subsidiarity helps guide decision-making. In social ethics, subsidiarity helps us prudentially judge not only decision-making but allocation of resources. Subsidiarity is an effort at balancing the many necessary levels of society – and at its best, the principle of subsidiarity navigates the allocation of resources by higher levels of society to support engagement and decision making by the lower levels. Despite how often it is stated – subsidiarity does NOT mean smaller is better.