I think the civ IV mechanic worked better. It did localize your empire to an extent, but it made sense. For ciV to improve I think we need an overall production bar and overall food and possibly health bar for your empire along with happiness. I think you should be able to transfer those overall resources directly to cities where it is most needed, as opposed to containing everything in a city's tiles, or purchasing through gold only. Don't know why it is relegated to just happiness.