I think one of the issues with modern democracy is the fact that it is rooted in the American past. Founding fathers set up an amazing system for 18th century. After globalization and rise of political advertising in mass media... well not so much. As a matter of fact politicians spend close to majority of their time just raising money [0][1]. Is it really a wonder Congress can't get anything done? Is it really a surprise that people who end up staying in politics for a long time are people who 'worked out' an understanding with special interests. System is setup to attract people who have friends which stand to gain from access to political power.
I think current political system of United States is flawed and we are leading other democracies by example, while making suboptimal decisions.
Interestingly enough I believe founding fathers foreseen this and provided us with an out - amendments. However with current gridlock it would be almost impossible to do anything about it without overwhelming popular support. Said gridlock also greatly benefits anyone who has enough spending money to 'help' politicians out with their campaigns.
So here is potential solution (I thought it up myself in relatively short amount of time, so there are probably issues with it):
1. Ban all monetary donations to politicians. All of them, no more advertisements.
2. Set up crowd sourced infrastructure to keep track of what politicians claim they would do and what they actually do. Kind of like wikipedia of politics.
3. Set up a public TV channel for debates and require all the major carriers to have it, live stream said channel on internet. Goal of this is to basically kill all political advertising elsewhere. On that channel televise debates on most up voted questions on infrastructure set up. Require candidates to provide clear answers and keep track of the answers on said infrastructure, so that people can view key issues and see how candidates responded to them.
There are a range of technological, societal, and organizational issues to accomplish something like this. It is easy to get wrong, and very hard to get right, so I am not sure if it would be worth trying in the first place.
0 - listen to the first three minutes to realize just how bad it is: http://www.thisamericanlife.org/radio-archives/episode/461/t... .
1 - or here is a shorter text version: http://www.npr.org/blogs/money/2012/03/26/149390968/take-the...