[Xeoncross]

That's an interesting way to look at it; governments merging into even larger entities is them giving up power?

The "government" isn't a unified mind. It's a group of individuals looking to further their career and (rarely) pursue a cause they care about. If two governments merge their law-sets into one, they aren't losing anything - the people involved are simply being promoted and gaining a broader peer influence with more vertical growth opportunities.