Iceland is to review its constitution in a unique experiment in direct democracy that will see citizens forming a new people's assembly.

An election tomorrow will select up to 31 citizens who will form the constitutional assembly that will convene early next year. Those elected will receive a salary equal to that of Iceland's MPs while the review takes place.

One candidate, Thorvaldur Gylfason, a professor of economics at the University of Iceland, said the country needed a fresh start after its economic implosion in 2008. "We need to ensure that the sort of malpractice and negligence that… led to the collapse of the Icelandic economy two years ago, cannot happen again."

Berghildur Erla Bergthorsdottir, the spokeswoman for the organising committee, said: "This is the first time in the history of the world that a nation's constitution is reviewed in such a way."

"We are hoping this new constitution will be a new social covenant leading to reconstruction and reconciliation, and for that to happen, the entire nation needs to be involved," said the prime minister, Johanna Sigurdardottir.

Anyone is eligible to stand, except the president, MPs and the committee appointed to organise the assembly. There are 523 candidates, including lorry drivers, university professors, lawyers, journalists and IT experts. All have been given equal airtime on Icelandic radio to make their platforms known.

The assembly will draw on material from another project this year in which 1,000 randomly chosen Icelanders – aged 18-89 – offered their views on what should be in the constitution.

However, not all candidates believe that the constitution should be amended. Thorsteinn Arnalds, an engineer, said: "The constitution had nothing to do with the bank collapse, and it is not standing in the way of rebuilding. Right now we need the basic social structures in place, not for them to be torn down."