Well, we’re fixing one key bit of it: the bit that ensures that there are sufficient willing referees to match the increasing flood of submissions. Scientists have strong incentives to write papers, but relatively weak incentives to review. We have to ‘publish or perish’, not ‘review or perish’. Professional norms oblige us to review when asked, but there’s increasing evidence that those norms are breaking down.
Hochberg et al. (2009 Ecol Lett) pointed out that this incentive structure creates a tragedy of the commons (Hardin 1968 Science). Reviewers are like an open-access resource, on which authors are free to draw at no cost to themselves. Unfortunately, while Hochberg et al. correctly diagnose the cause of the problem, the solutions they (and others) propose basically ignore the causes. For instance, here at Oikos we, like many journals, deal with the problem by simply sending out more review requests per ms than we used to, and we’re starting to reject more mss without review (a stopgap measure that’s likely to have perverse consequences…)
My colleague (and former Oikos editor) Owen Petchey and I have developed a solution that directly addresses the underlying cause of the problem: ‘privatize’ the reviewer commons. That is, create a set of rules (‘mutual coercion, mutually agreed upon’, in Hardin’s famous phrase) that obliges authors to obey the ‘golden rule of reviewing’ and review 2-3 papers for every one they submit. One way to impose this obligation is via an artificial currency, which we call PubCreds. Authors could be charged, say, 3 PubCreds per submission, with the fee going to pay 2 reviewers and the handling editor 1 PubCred each.
I’m sure this brief description raises many questions–to which Owen and I have answers (seriously, we’ve been spending a lot of time working on this):
For our original article on PubCreds in the 2010 ESA Bulletin, go here.
For our PubCreds blog, where we further develop the idea and address many of the concerns that have been raised to us, go here.
For a petition you can sign if you would like to see PubCreds seriously considered by journal owners in ecology, go here.
For links to blogs with discussion of PubCreds, go here.
Finally, here is a video of my recent invited seminar on PubCreds at the 2011 Emerging Trends in Scholarly Publishing conference:

[...] journals wanted solved. In contrast, many proposed reforms of the scientific peer review system, including one I’ve stumped for, aim to solve problems that many argue don’t even exist. And ExpressO seems to be narrowly [...]
By: What if science journals “bid” on manuscripts? « Oikos Blog on January 22, 2012
at 4:56 pm
[...] on from previous posts on reforming peer review (see here, here, and here), I wanted to note a new peer review service, Peerage of Science. PoS is a private [...]
By: Another peer review reform: Peerage of Science « Oikos Blog on January 23, 2012
at 5:40 am