Often we evaluate a system of government based on how effective it is, or how many liberties it gives to a people. So to be different here I will evaluate systems of government based on how ethical they are. Just as we often judge an ethical standard by the worst kind of behavior that is possible under it, so will I judge political systems by the worst kind of laws (ethically) that can be passed under them.
Before I begin however I must note that the following arguments assume we all agree that there is some objective ethical standard to which all societies and people can be held. If one believed that ethics were simply a matter of convention then it would be meaningless to say that one government was ethically better or worse than other, since the ethical standards of a society are partly determined by its government and laws, and thus every society would have to be considered ethical.
Anarchy then is probably the worst political system, since literally anything is possible under it; the limits of behavior are simply the limits of the least ethical person in that society. Second to last is monarchy / tyranny. These systems are slightly better than anarchy since the laws passed can only be as bad as the ruler is, but since people can be extremely unethical it is only a little better in the worst case. Slightly better than monarchy is rule by a small group of people selected by some standard other than popular opinion (aristocracy, oligarchy, plutocracy, theocracy, ect). Generally the group will have somewhat of a moderating influence on the most extremely immoral proposals, but once again history has shown that groups such as these can still enact horrible laws. One step better than these systems is the republic, a small group of rulers regularly elected by the people. Having the population involved curtails some abuses, but it is still possible for the body of elected officials to act unethically, especially if they don’t care about re-election.
A significant improvement over the republic is the democracy. A democracy removes the possibility of corrupt officials by giving all governing decisions to the people as a whole. Still majority rule does not prevent unethical laws from being passed. Simply the fact that the majority of people share a desire does not make that desire right (since we aren’t conventionalists). It is easy under a democratic system for laws to be enacted that are unfair to small groups of people who are disliked by the majority. Even guarantees of rights cannot fix this potential problem, since it is always possible for those guarantees to be voted out of existence, or to simply be ignored. Of course these same criticisms apply to the republic as well, but generally bad rulers are more responsible for immoral laws than bad voters.
This pretty much covers all the political systems which have been put into practice, but this doesn’t mean that a better system is impossible to conceive. Let us work with Scanlon’s definition of an ethical action, namely that an action is ethical if it can be defended on the basis of principles that no one can rationally reject. If we apply this definition of what is ethical to the government then we should conclude that a government acts ethically when it passes laws that no one can reasonably reject. Therefore we might conclude that a system like the following would be ethical: every citizen who can pass a basic competency test (to prove that they are rational) is allowed to veto any proposed law. A law then can only be passed then when all citizens agree to it. You might think that this would make some kinds of laws impossible to enact; after all it is a fact of nature that people have irreconcilable differences of opinion on many issues. To get a law actually passed then the creators of possible laws would have to include benefits to groups that disagreed with the law in order to get them to stop vetoing it. Thus every law would become a compromise, where every person in society gets something they wanted out of it. This also agrees with an ethical principle I proposed earlier, that one should not take unless something of equal or greater value is given in return, because to pass a law that would take from anyone you would have to promise them something better in that same law or they would simply veto it.
Of course such a system probably isn’t workable in practice, but then again neither is democracy. Just as we settled for a republic instead of true democracy it might be possible to construct a system where elected representatives did the vetoing for us. However such considerations are outside of the scope of the arguments presented here.