Larger wheels provide a better gyroscopic effect, given that the weight of the rotational mass is relatively equal. They also track over uneven terrain more evenly.

Thats not to say that small wheeled vehicles can't be stable, but rather that in moderation, bigger tends to be better. Vespa moved its wheelsize up from 8" to 12" over the years I believe, owing to this same trend.

Now, 16" is obviously bigger than 12", but when you're talking about the handling characteristics of low speed handling in regards to a bicycle, its still a fairly small wheel. I would personally expect an improvement with 20"