You have some things correct here. The problems we face are caused by the failure of the 18th century nation states that cannot operate as representative governments. The large ones are too large to work that way and the small ones are caught in the, now bankrupt, forms that were never democratic to begin with. Effective administration in the 21st century needs to be centered in urban regions to be directly democratic with major decisions and budget summaries confirmed by the people.
Putting, in effect, audit control in the hands of the administered population can reduce waste, corruption, and racism while expanding essential services (healthcare, nutrition, housing, education, environmental protection, Universal Basic Income, etc.) for all residents. The exact range of services provided can then be controlled by the population of areas with logical environmental and economic boundaries.
The provisioning of essential services is currently heavily provided by metropolitan units so this is a natural evolution. The elimination of layers of pseudo representative government controlled only for corporate elite interests alone would tremendously reduce costs and corruption while shifting to full sustainability. This would also allow a more natural conversion to stable, coop based and managed ventures that would handle risk and profit in the new sustainable world.