The liberal democracy period in Indonesia, from the re-establishment of a unitary republic in 1950 until the declaration of martial law^[71] in 1957, saw the rise and fall of six cabinets, the longest-lasting surviving for just under two years. Even Indonesia's first national elections in 1955 failed to bring about political stability.

Guided Democracy was the political system in place in Indonesia from 1959 until the New Order began in 1966. It was the brainchild of President Sukarno, and was an attempt to bring about political stability. Sukarno believed that the parliamentarian system implemented during the liberal democracy period in Indonesia was ineffective due to its divisive political situation at that time. Instead, he sought a system based on the traditional village system of discussion and consensus, which occurred under the guidance of village elders. With the declaration of martial law and the introduction of this system, Indonesia returned to the presidential system and Sukarno became the head of government again.

Sukarno proposed a threefold blend of nasionalisme (nationalism), agama (religion), and komunisme (communism) into a co-operative Nas-A-Kom or Nasakom governmental concept. This was intended to satisfy the four main factions in Indonesian politics—the army, the secular nationalists, Islamic groups, and the communists. With the support of the military, he proclaimed Guided Democracy in 1959 and proposed a cabinet representing all major political parties including the Communist Party of Indonesia, although the latter were never actually given functional cabinet positions.