The Liberal Democracy period in Indonesia, also known as the Era of Parliamentary Democracy, was a period in Indonesian political history, when the country was under a liberal democratic system. During this period, Indonesia held its first and only free and fair legislative election until 1999, but also saw continual political instability. The period began on 17 August 1950 following the dissolution of the federal United States of Indonesia, less than a year after its formation, and ended with the imposition of martial law and President Sukarno's decree, which resulted in the introduction of the Guided Democracy period on 5 July 1959.

The Presidential Decree of 5 July 1959 was issued by President Sukarno in the face of the inability of the Constitutional Assembly of Indonesia to achieve the two-thirds majority to reimpose the 1945 Constitution. It was army chief of staff Abdul Haris Nasution who concluded that this would be the only way to bring about the reintroduction of a constitution that paved the way for the military to play a greater role in the running of the state, ushering in the period known as the "guided democracy" (1959–1966).