Andres Manuel Lopez Obrador, Mexico's president. (Photo: Alejandro Cegarra/Bloomberg)

In the name of austerity, the government of Mexican President Andrés Manuel López Obrador has slashed budgets, fired thousands of federal employees and cut salaries since he took office on December 1.

Now, his party has also decided that high-ranking government officials may not work in private sector industries they once regulated for a period of 10 years after leaving government. The measure, aimed at ending the revolving door between the public and private sectors and cracking down on corruption, is one of the strictest in the world – well above the average three-year ban common among the 36 member countries of the Organisation for Economic Co-operation and Development.

Agustín García Robles, a legislator with the ruling Morena party, described the Republican Austerity Law as a measure that establishes public employment as a "vocation of service rather than a means to enrich oneself at the expense of the people". García Robles cast one of 321 votes in favour of the bill last week.

Yet many see the lengthy cool-off period as a major disincentive to working for the government, and a handicap for the country. Opposition lawmakers warned the stipulation will deepen the divide between the public and private sectors.

The 10-year ban is "really unreasonable" said Juan Francisco Torres Landa, managing partner at Hogan Lovells' Mexico practice. "After 10 years, your experience is useless."

The legislation approved by the lower house last Tuesday must still be published in the government's official gazette before taking effect. Currently, high-ranking government officials are supposed to abstain for at least one year from taking jobs in private sectors they regulated.

Corruption is a major issue in Mexico. By some estimates, it eats away 10% of the country's gross domestic product, and Mexico scores 28 out of 100 points available in Transparency International's Corruption Perceptions Index, where a lower score means more corruption.

That puts Mexico on par with such countries as Russia for clean business. The U.K. scored 80 points in the 2018 index, while the U.S. earned 71 points.

"As with many things we're seeing with this government, the diagnostic is correct in terms of the problems but the design of solutions is very deficient," Torres Landa said.

Mauricio Dussauge, a professor of public policy at Mexico's Center for Research and Teaching in Economics, said that, while corruption and conflicts of interest have been a terrible problem for Mexico, the 10-year prohibition will not properly address the issue.

Creating a culture of career civil service rather than cycles of political appointees, offering competitive salaries and clearly spelling out rules of engagement would be "more useful", he said.

Alejandra Palacios, head of the Federal Commission of Economic Competition, Mexico's antitrust body, penned an opinion article in July explaining how a 10-year ban would essentially make it impossible for someone like her to move into the private sector. Just in the first six months of this year alone, the commission studied 860 M&A deals in a wide range of economic sectors, including energy, health, finance, food and a myriad of others. A three-year period would be more manageable, she suggested.

A spokesperson for COFECE said Palacios would not be making additional public comments on the topic.

Public officials impacted by the ban could request legal injunctions, arguing that a 10-year work gap violates a human right guaranteed in Article 5 of the Mexican Constitution.

"It's a violation of the right to work in what one lawfully wants," said Rogelio Carbajal, a lawyer who was previously Mexico's deputy minister for public functions, overseeing civil servants.

Vicente Corta, a partner at White & Case in Mexico, said private sector companies are already wary of hiring from the public sector, afraid of breaking existing anti-corruption rules. This is a loss for individuals as well as business and government, he said.

"People who develop in both the private and public sectors are more efficient," said Corta, who spent 12 years at government financial entities before entering private practice.

The main benefit of hiring from the public sector, said Corta, is that those professionals understand how the government works and how to successfully broach a topic with government officials.

He also disagreed with the assumption that there is widespread corruption among public officials. Corta recalls diligently avoiding transactions in the entire financial sector, not just those related to pensions, for a year as he transitioned to private practice after having led Mexico's pension regulator.

"People are very professional," he said. "They're going to take the decision that's in the best interest of the country."

Above all, lawyers say, the revolving door ban would make it more difficult for the Mexican government to attract top talent.

"What we all fight for more than anything, everywhere, is for talent," said Corta. "The government should be fighting for talent."

Government institutions began to experience brain drain shortly after López Obrador was elected to office in July 2018 on promises to dramatically reduce government salaries. Then job cuts began in December.

Now, another wave of Mexican public servants has turned in resignation letters ahead of the revolving-door ban.

Agencies tasked with collecting taxes, regulating banks, protecting the environment, issuing business permits and expediting trade are working with skeleton crews. Executives and lawyers complain that government employees left carrying the burden are either overwhelmed with work or unqualified or both.

Torres Landa said he recently had to explain to a client why the Economy Ministry had not issued a registration number that should have been issued nearly a month ago. Without that number, the client can't operate, which puts hundreds of jobs at risk.

"There are hundreds of companies in the same situation," he said.