The fact that your dog can wag her tail and has a pinch reflex is a good prognostic sign because it means that she has deep pain but unfornuately it does not mean anything in the long term. The answer to that question lies in the cause of the paralysis, and how long it has been going on. I can tell you that if there was no deep pain, i.e., if she could not feel the pinching at all the prognosis would be grave.
Neurological deficits can be improved, depending on the cause and other factors, if they are addressed by the correct treatment method. Is your dog being treated by a neurologist? Has your dog had an MRI. If there is significent spinal compression than your dog needs surgery. If your dog has already had surgery it will take a while for normal function return...and the list goes on...
If surgery is not an option than steroids, muscle relaxers, acupuncture and chiropractic may help.
If I see an animal (either bird or small mammal) with no vent control, flaccid tail and no deep pain response in the hind legs I consider it paralyzed. Prognosis is not good at that point. If I see some response in any of those areas I give it time. Of course an x-ray helps determine any pelvic or spinal fractures too. Yet I've worked with animals that never improve to some that come back to 50%, 80% or even better. Has your dog been seen by the vet yet?
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