As countries around the world engage in a “race to AI regulation” to increase trust and uptake of AI systems, little attention has been paid to the role of multilateral development banks (MDBs) in shaping AI governance in the Global South. This article aims to address this gap in the literature by exploring how MDBs construct an intricate, dense “legal fabric” comprised of a range of binding and nonbinding instruments that act at international, regional, and project-specic sites. MDBs provide funding, technical assistance, and drafting advice for the creation of national laws, policies, and regulatory frameworks–but they also exert leverage through a range of other legal, bureaucratic, and organizational instruments, including loan agreements, project appraisal documents, operational manuals, impact and risk assessment frameworks, terms of reference, guiding principles for infrastructure design, and playbooks for policymakers. These documents shape, reinforce, embed, and stabilize norms with direct impacts on AI systems, and are deeply entangled with law and legal concepts from a variety of doctrines, particularly data protection, algorithmic governance, and cybercrime. “Untangling” this legal fabric reveals several difcult normative, political, and distributive questions regarding both the procedural means through which MDBs shape and enact these instruments, and the substantive norms that are “baked” into this legal fabric and the digital infrastructures they encase. This article concludes by arguing that MDBs must ensure that their work on AI regulation reduces digital inequality, reects the needs and values of the communities they operate in (rather than a top-down, Global North-driven approach), and incorporates active participation from various “publics” that may be directly and indirectly impacted by these systems.
