Francis Turretin is most helpful in the sometimes heated discussion of whether the covenant God made with the Israelites on Sinai was simply the covenant of grace renewed, or simply the covenant of works republished, or something else (a third thing). Turretin first rejects the “third covenant” opinion, which the “celebrated man, John Cameron” (the Amyraldian) taught (II.262).
Turretin then goes on to say that the Mosaic covenant was “nothing else than a new economy of the covenant of grace. It was really the same with the covenant made with Abraham, but different as to accidents and circumstances” (II.263, cf. II.226-7).
Having said that, Turretin explains the works principle that was active in the Sinaitic covenant by explaining that the covenant of grace here at Sinai was “clothed as to external dispensation with the form of a covenant of works through the harsh promulgation of the law; not indeed with that design, so that a covenant of works might again be demanded with the sinner [for this was impossible], but that a daily recollection and reproaching of the violated covenant of works might be made; thus the Israelites felt their sin and the curse of God besides hanging over them and acknowledged the impossibility of a legal righteousness…” (II.263). The works principle – the covenant of grace clothed with the covenant of works – was to drive the people away from themselves to the righteousness of God and the redemption of which he is the author.
“Hence in it (the Sinaitic Covenant) there was a mixture of the law and the gospel” (Ibid.). The covenant of grace was “under” the “rigid legal economy,” and over it (or “clothing it” as Turretin noted above) was a “new promulgation of the law and of the covenant of works” (II.227).
In summary, the promise of God in the covenant of grace was the foundational, internal, and fundamental aspect of the Sinaitic covenant. The rigid legal part of the Sinaitic covenant was external and accidental – not the foundational basis of the covenant. The external was to drive the people to the internal – the ceremonies were to point the people to the promise, the law was to drive the people to the gospel.
Some Reformed teachers emphasize the gracious aspect of the Sinaitic covenant; others emphasize the works aspect of this covenant. As long as we affirm what Turretin (and other Reformed theologians) said and acknowledge both grace and works here, we will steer clear of several serious errors.
Above quotes taken from Francis Turretin, Institutes of Elenctic Theology (Philipsburg: P&R, 1994).