perfectly possible to use a smaller bore exhaust, it'll still work
whats more inportant to consider is the desing and shape of the system and the silencers.
turbos make excelent silencers themselves so when doing a turbo exhaust you only need a singel box at the back of the system, as for sizeing of the pipes a smaller bore well desinged and built system can outflow a larger bore system at a given pressure differance quite easaly. nice sweeping mandrel bends FTW 3" is often preferd as it sounds better and helps them sell
thers not much point being fussy with the downpipe if your still running a std manifold TBH as thats nasty