Measuring Equitable Prosperity in the EU-27: Introducing the IDDO, a Composite Index of Growth and Income Inequality (2005–2024)

Narcis Eduard Mitu () and George Teodor Mitu
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Narcis Eduard Mitu: Faculty of Economics and Business Administration, University of Craiova, 200585 Craiova, Romania
George Teodor Mitu: Faculty of Economics and Business Administration, University of Craiova, 200585 Craiova, Romania

World, 2025, vol. 6, issue 3, 1-16

Abstract: This article introduces the Index of Distributive and Developmental Outlook (IDDO), a composite indicator designed to jointly assess economic performance and income inequality across EU-27 Member States. While GDP per capita is widely used to evaluate national prosperity, and the Gini coefficient captures income distribution, their separate use often obscures the interaction between growth and equity—an essential dimension of sustainable development. To address this gap, the IDDO integrates normalized values of both indicators using arithmetic and geometric means. The study applies the IDDO to a longitudinal dataset covering the years 2005, 2014, and 2024, allowing for comparative and temporal analysis. Based on IDDO scores, countries are classified into four development types: balanced development, growth with inequality, equity with stagnation, and dual vulnerability. Results show that while some Member States, such as Luxembourg, Czechia, and Slovenia, maintain consistently high IDDO levels, others—including Bulgaria, Romania, and Latvia—exhibit persistent challenges in aligning growth with equitable outcomes. The findings underscore the need for cohesion policies that prioritize not only economic convergence but also distributive fairness. The IDDO provides a practical and adaptable tool for diagnosing development patterns, benchmarking performance, and informing policy design within the EU framework.

Keywords: sustainable development; inequality; composite indicators; IDDO; EU-27 (search for similar items in EconPapers)
JEL-codes: G15 G17 G18 L21 L22 L25 L26 Q42 Q43 Q47 Q48 R51 R52 R58 (search for similar items in EconPapers)
Date: 2025
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