Covenant Theology vs. Dispensationalism (And Its Varieties)

Christians differ over the relationship of the Old Testament to the New Testament. Another way of saying this is that Christians differ over the relationship of the old covenant to the new covenant. Tied with this is the issue of the relationship of Israel to the church.

Many conservative churches in the Western world hold to a strong discontinuity between the old and new covenants, a view that is known as dispensationalism. This would include many Baptist and non-denominational churches.

However, dispensationalism is a fairly modern view, arising in the mid-1800s. Historically, the Christian church held to a stronger continuity between the old and new covenants, or what is known as covenant theology. This is true of the churches coming out of the Reformation, but it is especially true of the Calvinistic branches, the Reformed and Presbyterians. These churches base their practice of infant baptism on the continuity of the covenants and the correspondence of baptism to OT circumcision.

In the past few decades, there has been a significant shift away from 19th-century classical dispensationalism, with many moving closer to covenant theology (in varying degrees). Thus, there is now a broad range of views regarding the relationship of the old covenant to the new and of Israel to the church. These views range from the most discontinuity to the most continuity below:

(1) classical dispensationalism
(2) revised dispensationalism
(3) progressive dispensationalism
(4) new covenant theology
(5) covenant theology

Let’s briefly survey each of these views.

(1) Classical Dispensationalism

Dispensationalism was developed in the 1830s by John Nelson Darby, and it was made famous by the Scofield Reference Bible. This theology makes a strong distinction between OT Israel and the NT church. Israel is a “physical and national” people, while the church is a “spiritual” people. Classical dispensationalism sees two different ways of salvation for Israel and the church—Israel was saved by adherence to the old covenant (which includes faith), while the church is saved by grace through faith in Christ.

Classical dispensationalism also holds that the OT promises must be understood as “literally” applying to national Israel. These promises, such as the land promise, do not apply to the church. The church is part of the “parenthesis” of salvation, as the original promises were made to Israel and Israel rejected Christ.

Dispensationalism is most famous for its view of eschatology (end times theology), holding to a pre-tribulational rapture, a seven-year tribulation period, and a literal 1,000-year reign of Christ after His second advent (premillennialism). In other words, Jesus will one day rapture Christians, this will be followed by seven years of tribulation, and then Jesus will return to set up His kingdom on earth for 1,000 years. Then there will be a final judgment.

There are seven dispensations in this scheme (hence the name): (1) Innocence (Eden); (2) Conscience (fall to flood); (3) Human Government (Noah to Babel); (4) Promise (Abraham to Egypt); (5) Law (Moses to John the Baptist); (6) Grace (church age); and (7) Kingdom (millennium).

(2) Revised Dispensationalism

Classical dispensationalism underwent some revisions, including the abandonment of the distinction between the “earthly” and “heavenly” peoples of God. This revised dispensationalism also rejected the belief that the new covenant in Jeremiah 31 was not for the church. Advocates instead hold that the church is the “spiritual” seed of Abraham (Galatians 3:16-29) and that the Abrahamic covenant was fulfilled spiritually in the church. However, they still insist on a “literal” fulfillment of the OT promises to Israel, and they follow dispensational eschatology (pre-tribulational premillennialism). Adherents include John Walvoord, Charles Ryrie, and Dwight Pentecost.

(3) Progressive Dispensationalism

Dispensationalism was modified further by men such as Craig Blaising and Darrell Bock. Advocates use the term “progressive” to emphasize the successive arrangements of the dispensations. Progressive dispensationalists do not make as sharp of a distinction between Israel and the church. In other words, the present church age is not a “parenthesis” resulting from Jewish unbelief (as other dispensationalists held). God always planned to save the Gentiles as part of redeemed humanity. However, progressive dispensationalists still see the church as something new, and the promises to Israel in the OT are still available for Jewish Christians (including the land promise).

Summary Characteristics of Dispensationalism

Though there are variations, we can summarize five common tenants of dispensationalism:

  1. A strong distinction between Israel and the church.

  2. A principle of “literal” interpretation (particularly regarding the land promise).

  3. God’s relationship to the church differs in some ways from Israel (including the inclusion of children in the covenant).

  4. A strong distinction between law and grace.

  5. A strong premillennial emphasis in eschatology.

(4) New Covenant Theology

New covenant theology (NCT) is a recent view, which proponents such as John Reisinger and Fred Zaspel claim is a via media between covenant theology and dispensationalism. NCT is closer to CT in that it holds the church is the new Israel in Christ. However, NCT sees a change in covenant membership that is similar to dispensationalism—the new covenant is made only with the elect, in contrast to the Abrahamic covenant made with believers and their children. Thus, NCT rejects infant baptism.

NCT also stresses a change in the law in the NT. Advocates reject the three-fold division of the law (moral, ceremonial, civil) and reject any place of the Mosaic law for the NT church. Instead, the church is to be governed by the “law of Christ” (1 Corinthians 9:21). All advocates of NCT are credo-baptists, but not all Baptists hold to NCT. Some Reformed Baptists prefer to identify with CT while differing with CT on baptism.

There is also the view known as progressive covenantalism, advocated by Stephen Wellum. This has strong similarities with NCT.

(5) Covenant Theology

Covenant theology (CT) is the Reformed position that sees strong continuity between the old and new covenants. CT holds that changes in the new covenant are in the administration of the covenant, not in its essence. Thus, the new covenant is essentially the same as the Abrahamic covenant. The Abrahamic covenant has been renewed through the coming of Christ. As Louis Berkhof said, “The covenant of grace, as it is revealed in the New Testament, is essentially the same as that which governed the relation of Old Testament believers to God” (Systematic Theology, 300).   

CT is not “replacement theology” as is sometimes claimed. Gentiles did not replace the Jews. Rather, Gentiles have been grafted into the covenant, while unbelieving Jews have been cut off (Romans 11).

CT holds that the new covenant is still a mixed covenant. The Abrahamic covenant included believers and their children, and there were thus believers and unbelievers in the OT covenant community. The new covenant (as a renewal of the Abrahamic covenant) is still made with believers and their children, and thus CT adheres to the practice of covenantal infant baptism. However, CT makes a distinction between covenant and election, in what is known as the “dual aspect” of the covenant. The elect are those whom God has chosen for salvation before eternity, and they faithfully keep God’s covenant. But there are those in God’s covenant who will break the covenant through unfaithfulness (apostasy).

Traditionally, covenant theologians held to a three-fold division of the law, with the moral law still binding the NT church. Identifying which OT laws are “moral” can be a difficult task. Yet it is important to note that the NT authors cite the Decalogue (e.g. Ephesians 6:1-4), showing its validity for the church.

Arguments for Covenant Theology

As an advocate of Reformed covenant theology, I cannot close without at least mentioning brief arguments for CT. First, the Greek word translated “church” (ekklesia) in the NT is used in the Septuagint (the Greek translation of the OT) 69 times to translate the Hebrew for “congregation” or “assembly” (qahal). This use of ekklesia for the OT people of Israel is continued in the NT (Acts 7:38; Heb 2:12).

Second, this continuity of God’s people is seen in Romans 11:17-24, where Paul tells us that the Gentiles have been grafted into God’s olive tree.

Third, Gentiles and Jews have been made “one” (Ephesians 2:14), are “one new man in place of two” (Ephesians 2:15), and are “fellow citizens with the saints and members of the household of God” (Ephesians 2:19).

Fourth, the church is made up of those who have faith in Christ, and “it is those of faith who are the sons of Abraham” (Galatians 3:7). Those who are in Christ are “Abraham’s offspring” (Galatians 3:29), the true Israel (Romans 9:6-8).

Fifth, God says He will make a new covenant with the “house of Israel and the house of Judah” (Jeremiah 31:31). Hebrews 8 then applies this prophecy to the church.

Sixth, there is a problem in saying OT believers are not part of the church. The Bible makes it clear that there is no salvation outside of Christ (John 14:6; Acts 4:12) and that Christ died for the church (Ephesians 5:25). So to be saved, OT believers must have been part of the church.

The Bible teaches a strong continuity between the old and new covenants and between Israel and the church. While there have been some changes in covenant administration, I do not think these changes warrant the adoption of a form of dispensationalism or new covenant theology. Of course, much more can be said about the intricacies of both dispensationalism and covenant theology. This is only an overview, and specific issues will have to be addressed in the future.


Make sure to check out our list of recommended books on covenant theology.