Efforts to improve public service provision typically focus on either a top-down combination of monitoring and sanctioning or a bottom-up empowerment of civil society. Research suggests that while both methods can enhance state capacity, top-down approaches may involve higher policy implementation costs, and bottom-up methods are prone to elite capture. However, limited empirical research has explored their potential institutional complementarity. We argue that combining both approaches increases state's capacity to provide universal goods and services. Using data from Brazilian municipalities, we examine how the effects of participatory budgeting (PB) are conditional on anti-corruption audits through a difference-in-differences with heterogeneous effects design. The results suggest that PB increases healthcare spending, especially in municipalities with strong state bureaucratic capacity, where spending shifts toward universal rather than targeted goods. These findings contribute to the understanding of the conditions under which participatory institutions can enhance democratic provision to meet universal needs.