methodology to a set of countries in Europe, namely France, Hungary, Italy, the United Kingdom (Brenner & Fazekas 2023).

The second unique feature of our proposed indicator set is that we track additional indicators of legislative and regulatory activities. Using these indicators as covariates allows us for a better understanding of these measures' contribution to enhanced legislative stability (and quality). We introduce each of the most relevant potential covariates below.

_Category of law_ : Laws and regulations might have different modification patterns and the category of legislation should account for that. As a categorical variable, it takes the value of 0 for regulations and 1 for laws.<sup>3</sup> Incorporating the category allows us to understand which type of legislation is prone to legal uncertainty and thus require closer attention in the future.

_Sector of law_ . Given that a standard classification of economic sectors is available across countries, such as NACE in the EU, it is possible to assign laws to economic sectors based on their texts and they matching to sector descriptions. This enables a closer look at those sectors that are particularly exposed to legal and regulatory instabilities and allows for targeted political counter-measures to protect businesses in these sectors. More details on this variable can be found in Section 3.3., below.

_Initiator of law_ . Knowing the initiator of legislation not only allows us to observe which actors are generally more active in drafting laws and regulations but also check for the initiators that are linked to higher levels of regulatory predictability or lack of thereof.

# **3.3 Sectoral Classification**

To analyze legislative predictability by economic sector, we have to assign laws and regulations to economic sectors. As our source legislative dataset does not contain such information, we classify laws into economic sectors in a separate analytic stage after the data collection process. The goal of matching laws and regulations to specific sectors is to identify if some are more exposed to unpredictable legislative environment compared to others.

In order to classify laws and regulations into economic sectors, we rely broadly on _Statistical Classification of Economic Activities in the European Union_ (NACE) industry classifications. NACE is an industry standard classification system and mirrors the United Nations’ _International Standard Industrial Classification of all Economic Activities (ISIC)_ . Both NACE and ISIC follow the same logic . While these categories are widely used in the industry and by international organizations, they come with a few caveats from the perspective of legislative analytics. First, a few categories of laws and regulations are not present in the NACE classification, but they are of high relevance for defining the sample for analysis. For example, not all legislation is relevant for economic industries. Various laws and regulations tackle issues of personal life (e.g. marriage or citizenship). We labeled such legislation as

> 3 We collected all primary laws ( )دستورand regulations ( )نظامon the LOB website while excluding constitutional laws

> ( ,)دستور agreements ( )اتفاقیةand instructions/guidelines ( )تعلیمات due to their less economic and/or more administrative scope.

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