It's better to ask the question in a different way. We know what bad laws are. They're laws that benefit some interest group at the expense of the general public, e.g. by constraining competition or diverting tax dollars to cronies.
So the question is, how do you eliminate bad laws? This isn't a question of what a hypothetical legislature should do if it was full of good faith actors, it's a question of how to structurally align the incentives of a real legislature with the interests of the general public so that they're inhibited from passing bad laws.