The words inward and outward are often used in Reformed theology to resolve problems that arise because biblical texts are approached from the perspective of election. Indeed the seeming indispensability of this formula indicates that the covenant is commonly viewed from the perspective of election, rather than election from the perspective of covenant. The distinction is necessary to account for the fact that the covenant community appears to include both elect and nonelect. The nonelect are then said to be only outwardly in the covenant. The elect are inwardly in the covenant. Covenant is virtually dissolved into the idea of election.
It is my view that Reformed dogmatics has struggled to reflect the biblical data in failing to maintain the distinction between the experience of the believer and (i) the secret elements of the divine counsel; (ii) the salvific state of the soul. If these distinctions are maintained, the possibility of ‘falling away’ causes fewer doctrinal problems.
Attempts at systematising soteriology have falsely sanctioned the intrusion of the secret elements of the divine counsel into the experience of the individual. It is as a result of this that the division of assurance and faith has occurred in Reformed theology.