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GHC has a really hard time inlining recursive calls---such as those used in interpreters for higher-order effects. This can have disastrous repercussions for your performance.

Fortunately there's a solution, but it's ugly boilerplate. You can enable -XTemplateHaskell and use inlineRecursiveCalls to convince GHC to make these functions fast again.

inlineRecursiveCalls [d|
  runReader :: i -> Sem (Reader i ': r) a -> Sem r a
  runReader i = interpretH $ \case
    Ask -> pureT i
    Local f m -> do
      mm <- runT m
      raise $ runReader (f i) mm
  |]