In this Foundation Series, SF author Isaac Asimov prophecized democracy has a shelf life of two to three centuries. Then it falls in on itself and is replaced by an oligarchy.
Your first solution is not-so-good. I spent six years in a Canadian political party only to find it mostly a contest of people vying for a higher position in the party. I believe all political parties are like this. Not a good formula for an advancing civilization.
Your second solution has a lot of merit. Lots of education required. We need to look beyond our family and tribe and ideological mates.
We also need to break that Asimov cycle. During my time in politics, I somehow invented another system to do away with all the dysfunction I was seeing.
My ideas was shaped, in part, by also reading "Decline and Fall of the Roman Empire." It was a slow process, just like some of us can see happening today.