The purpose of the work is to investigate public incentive legal relations in the system of public authorities with the participation of municipalities. The development of incentive legal relations is conditioned by the need to find new forms of improving the efficiency of local government bodies and to widely involve the population in solving issues of local importance. Considerable attention in the article is paid to municipal education as a subject receiving encouragement from a higher level of public authority (a subject of the Russian Federation), and as a subject encouraging a lower level of self– government – territorial public self-government. The forms used in the mechanism of implementing the incentive policy are touched upon. The development of these forms requires further improvement of the legal grounds for encouraging all participants in municipal legal relations. The introduction of means of material and moral encouragement, procedural consolidation of incentive relations contributes to a more effective solution of municipal problems.