For 27 years, George M. Ferris Jr. has been circling the globe, trying to convince developing nations to adopt policies that encourage their citizens to invest in industries in their own countries.

It's been a struggle most of the way for Ferris, a Washington brokerage executive and a consultant for the Agency for International Development (AID). But he is not about to give up.

After the Christmas holidays, Ferris will pack his bags once again, put on his international hat and head off on another trip, this time to Kenya and Indonesia. It will be his 33rd overseas mission since 1960 -- his fourth trip to Kenya and his fifth to Indonesia.

When he is not traveling, Ferris, 60, runs Ferris & Co., the family brokerage firm in Washington that was founded in 1932 by his father, George M. Ferris, now 94 years old. The elder Ferris, chairman of the company, remains active in the brokerage business. George Ferris Jr.'s two sons also work at the firm. George M. Ferris III, 36, is an investment executive. Willard Bradley Ferris, 33, works on the operations side of the firm.

Wherever he goes, Ferris carries with him a basic tenet: "The only way you can develop a country is by encouraging private sector development."

Ferris believes it is important to repeat the message often.

To people in many countries, financing business and industry through the sale of stocks and bonds is an unfamiliar concept. Change does not come easily.

"I can only point to tangible progress in two of the countries I've worked in -- Korea on four occasions and Singapore twice," he said. "So it's not a very good batting average. But the thinking process is changing."

Developing countries are beginning to reconsider their need for private sector development and trying to find ways to mobilize domestic capital, Ferris said.

Also, the Reagan administration appears increasingly willing to tell foreign governments that if they want U.S. help, they have to adopt policies that will help their economies expand.

In Kenya, Ferris will talk to government officials about including high-ranking government policy makers on their proposed Capital Markets Development Authority -- an agency that would regulate and promote raising money for business development.

He also will talk about the "privatization" of two Kenya national banks that sold stock to investors.

In Indonesia, the discussions may be more difficult.

Since 1978, when Ferris wrote his first report on Indonesia, the World Bank, the Asian Development Bank and the Agency for International Development have echoed his findings in their reports. Ferris helped with the latter two. Yet, in nine years, Ferris said, the Indonesian government has not acted on any of the recommendations.

While a stock exchange exists in a grand building in Jakarta, Ferris said, relatively little ia going on in the way of trading. On a trip to Indonesia last February, Ferris said, he told Indonesian officials it was time to act.

"They agreed with me," he said. "And the U.S. AID mission out there agreed to put a coordinator right in the Ministry of Finance." The coordinator's job will be to "keep things moving," Ferris said.

Ferris said he and another AID adviser will make periodic trips to Indonesia to advise officials on "how to overcome the ever-present political obstacles in order to effect some of the recommendations to improve their capital markets."

Ferris said he thought action might be forthcoming. "What they realize is that with the loss of oil revenues -- they are a major oil exporting country -- they've got to build their financial markets," he said.

Ferris' overseas missions have taken place under the auspices of several organizations, including the Agency for International Development, the World Bank's International Finance Corp. and the Asian Development Bank. He also has worked directly as a consultant for the finance ministers of Korea, Singapore, Indonesia and Taiwan.

Currently, he is director of the Financial Markets Project of the AID Bureau for Private Enterprise, in which Arthur Young & Co., the accounting firm, is the prime contractor and Ferris & Co. is a subcontractor.

When he first began traveling abroad in the 1960s, Ferris said, the emphasis was on helping developing countries start their own stock exchanges. But Ferris said he wasn't satisfied with that approach, believing that a stock exchange isn't much use without capital markets to support it.

Ferris said he believes that if a government wants to improve the standard of living of its people, it must attract capital from its citizens to expand industry. Without a favorable investment climate for domestic capital, it is impossible to attract money from overseas, he said.

"Capital markets and capital mobilization cannot be legislated into being," he wrote in a report to the government of Kenya.

"Incentives are necessary to entice private businesses, both foreign-owned and domestic, to accept outsiders as minority shareholders; to encourage the general public to purchase shares and bonds, and to stimulate the middleman {i.e., the underwriter and the stockbroker} to educate potential investors and promote the process of bringing buyers and sellers together. These incentives provide the catalyst for capital market development."

These are not always easy concepts to get across, Ferris said. There are many reasons it may be difficult to create a new investment system in a developing country.

For one thing, he noted, many countries lack the auditing requirements that are key to regulating public and private companies and, especially, to operating a tax system.

In addition, the concept of "total return" -- interest plus appreciation -- is not familiar to many investors who are chiefly interested in yield, or interest payments. In some countries, he said, interest on bank deposits may be tax deductible, whereas corporate dividends may be taxed twice or three times.

Some governments, meanwhile, find it difficult to offer special incentives to the wealthy to invest, lest they be accused of favoring the "trickle-down" approach.

Ferris said, however, that unless a government can offer wealthy individuals enough incentives to invest in industrial companies rather than in real estate, it is difficult to create a capital markets system.

Other problems crop up, Ferris said, when the government sets the price on a public offering of stock, instead of permitting the company and the underwriter to negotiate the price, as in the United States.

Some years ago in Korea, he said, the government was encouraging private firms to "go public." The firms were reluctant because the government was setting the prices for the stock at either book value -- assets minus liabilities -- or at some other nominal value.

By setting the price, the Korean government was, in effect, saying the stock was attractive at that price, Ferris said. If a company began to lose money, it was considered embarrassing to the government because the government had set the price.

Eventually, Ferris said, he convinced the government to permit a beer company to make a public offering at 150 percent of its book value. The offering was a success, encouraging the government to set more realistic prices for stocks that recognized the companies' earning power.

Despite the frustration that accompanies much of his overseas work, the assignments have their advantages, Ferris said.

"I would rather do one of these assignments than take a vacation," he said. "It's a type of trip a tourist couldn't buy. You're working with top officials in a government. You get to know the country because you're working with the people of the country. And you even get a little VIP treatment, which I'll never get around Washington, and I kind of like it."