  The role of instantons in three dimensional N=2 supersymmetric SU(2)
Yang-Mills theory is studied, especially in relation to the issue of
confinement. The instanton-induced low energy effective action is derived by
extending the dilute gas approximation to the super-moduli space of instantons.
Following Polyakov's description of confinement in compact U(1) gauge theory,
it is argued that there is no confinement in N=2 supersymmetric Yang-Mills
theory.
